Chapter 5 Flashcards Preview

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Flashcards in Chapter 5 Deck (17):
1

Expenses incurred that are not related to marketing the company's product

Administrative Expenses

2

The cost of the merchandise inventory that the business has sold to customers

Cost of Goods Sold

3

The payment terms of a purchase or sale as stated on the invoice

Credit Terms

4

The buyer takes ownership of the goods at the delivery destination and the seller pays for the freight

FOB Destination

5

The buyer takes ownership of the goods after the goods leave and the buyer pays the freight

FOB Shipping Point

6

Transportation cost to shipping goods into to purchaser's warehouse; freight on purchased goods

Freight In

7

Transportation cost to ship the goods out of the seller's warehouse; freight on goods sold

Freight Out

8

Excess of net sales revenue over cost of goods sold

Gross Profit

9

Measures the profitability of each sales dollar above the cost of goods sold; Gross Profit/Net Sales Revenue

Gross Profit Percentage

10

The loss of inventory that occurs because of theft, damage, or errors

inventory Shrinkage

11

A seller's request for payment from the purchaser

Invoice

12

The merchandise that a business sells to customers

Merchandise Inventory

13

A business that sells merchandise, or goods to customers

Merchandiser

14

Income statement format that contains subtotals to highlight relationships. Reports gross profit and operating income

Multi-Step Income Statement

15

Purchases less purchase returns and allowances less purchase discounts

Net Purchases

16

Sales Revenue less Sales Returns and Allowances and Sales Discounts

Net Sales Revenue

17

Expenses that are incurred in the entity's major line of business other than Cost of Goods Sold

Operating Expenses