Merchandising Flashcards
Merchandising is also called as a
Trading business
______________ companies buy goods in salable form and sell them to their customers at a higher cost to make a profit. Examples
are department stores, bookstores, appliance stores, and other resellers
Merchandising
_________ companies buys raw materials with the intention of using them in making a new
product.
Manufacturing
goods that a merchandising company sells to its customers are called _________ (____)
Inventory (merchandise)
The income statement of a service business differs from that of a merchandising concern.
true, they differ from one another
Revenue
- Expenses
= Net Income/Loss
The general format of IS of a Service Business
Net Sales - COGS = Gross Margin - Operating Expenses = Net Income/Loss
The general format of IS of a Merchandising
__________________ provides accounting records that continuously disclose the amount of inventory.
Usually used by companies that sell merchandise with a high individual unit value (EX.: jewelry, appliances, cars)
Perpetual Inventory System
__________________ the ending inventory is determined by making a physical measurement of the goods on hand at the end of the period.
Normally used by companies that sell merchandise with a low value per unit (EX.: department store, drug store, hardware stores)
Periodic Inventory System
Alpha Company purchased merchandise from Omega Enterprise worth P50,000
Alpha (Buyer)
Purchases 50,000
Cash 50,000
Omega (Seller)
Cash 50,000
Sales 50,000
Alpha Company purchased merchandise from Omega Enterprise worth P75,000 on account with terms 2/10, n/60
Alpha (Buyer)
Purchases 75,000
Accounts Payable 75,000
Omega (Seller)
Accounts Receivable 75,000
Sales 75,000
_______ these include cash discounts to induce the early payment of an account.
Credit Terms
__________ deduction from gross invoice price that the buyer can take only if he pays the invoice within the specified period of time.
Cash Discount
2/10, n/30 means
2 % discount from the gross invoice price if he pays it within 10 days following the invoice date. The gross invoice price is due 30 days from the invoice date.
if ______, it is recorded as a purchase discount; if ___________ it is recorded as a sales discount
BUYER , SELLER
