MIDTERM Flashcards
Business borrowed cash from PNB
a. Operating Activity
b. Investing Activity
c. Financing Activity
C
Business purchased building
a. Operating Activity
b. Investing Activity
c. Financing Activity
B
Business pays for advertising
a. Operating Activity
b. Investing Activity
c. Financing Activity
A
Business received cash for sold inventory
a. Operating Activity
b. Investing Activity
c. Financing Activity
A
Owner invested cash in the business
a. Operating Activity
b. Investing Activity
c. Financing Activity
C
Inventory system that updates the Merchandise Inventory account for every purchase and sale transaction.
Perpetual Inventory System
Payment arrangements determined by the seller as to when invoices are due and whether early payment discount is offered.
Credit Terms
Statement where net income is determined by deducting all expenses from all revenues.
Single-Step Income Statement
Inventory system that updates the Merchandise Inventory account only at the end of the accounting period based on a physical count of merchandise on hand.
Periodic Inventory System
Losses of inventory due to theft, damage, spoilage, etc. that cause the actual inventory on hand to be less than that on record.
Inventory Shrinkage
Statement that includes subtotals for net sales, gross profit and net operating income in determining net income.
Multi-Step Income Statement
Shipping terms where the ownership of merchandise passes to the buyer when the buyer receives the merchandise.
FOB Destination
Shipping terms where the ownership of merchandise passes to the buyer when the seller delivers the merchandise to the freight carrier.
FOB Shipping Point
