accounting for the sale of goods

Question 1

gross profit

Answer 1

the difference between sales revenue and cost of goods sold

Question 2

merchandize inventory

Answer 2

goods that are held for a resale by a merchandizer (reported as an asset)

Question 3

perpetual inventory system

Answer 3

the way of managing inventory where the merchandize inventory and COGS accounts in the general ledger are updated immediately when a purchase or sale of goods occurs

Question 4

periodic inventory system

Answer 4

a way of managing inventory where the purchase of merchandise inventory is debited to a temporary account called Purchases