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2nd Semester > FABM CHAPTER 14 > Flashcards

FABM CHAPTER 14 Flashcards

1
Q

buys goods (i.e. inventories) and sells them to
customers for a profit.

A

merchandising business

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2
Q

The goods bought by the merchandising business from its suppliers are called what?

A

Purchases.

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3
Q

The merchandiser add-up a value (i.e. markup or gross profit) to the______________ of goods and charges the total amount to the customer.

A

purchase prices

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4
Q

The merchandiser ___________ to the
purchase prices of goods and charges the total amount to the customer.

A

add-up a value (i.e. markup or gross profit)

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5
Q

The total amount charged to customers is called what?

A

Sales

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6
Q

Seller’s perspective of Agreed selling price of the goods

A

Sales

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7
Q

Buyer’ s perspective of Agreed selling price of the goods

A

Purchases

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8
Q

Seller’s perspective of Return by the buyer of defective or
non-conforming goods to the seller

A

Sales return

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9
Q

Buyer’s perspective of Return by the buyer of defective or
non-conforming goods to the seller

A

Purchase returns

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10
Q

Seller’s perspective of Agreed reduction in selling price

A

Sales discount

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11
Q

Buyer’ s perspective of Agreed reduction in selling price

A

Purchase discount

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12
Q

Seller’s perspective of Agreed reduction in selling price for
poor quality goods which the buyer
agreed to retake at reduced price

A

Sales allowances

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13
Q

Buyer’ s perspective of Agreed reduction in selling price for
poor quality goods which the buyer
agreed to retake at reduced price

A

Purchases allowances

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14
Q

Seller’s perspective of Transportation cost of bringing the
goods to buyer’s place of business

A

Freight-out

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15
Q

Buyer’ s perspective of Transportation cost of bringing the
goods to buyer’s place of business

A

Freight-in

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16
Q

This is an established price determined by reference
to a catalog or general price list before deducting any discounts.

A

List price

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17
Q

This list price less any trade discounts.

A

Invoice price

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18
Q

This is the
gross billable amount by the seller to the buyer.

A

Invoice price

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19
Q

This is the
amount that is indicated in the billing statement of the seller.

A

Invoice price

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20
Q

Pertains to a direct deduction to the invoice price on account of
volume purchases made by a buyer.

A

Trade discount

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21
Q

Trade discount is also called what?

A

volume discount or quantity discount

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22
Q

This discount is usually given when the
buyer is a fellow merchandiser in order to allow him to profit for the resale
of the goods to his customers.

A

Trade discount

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23
Q

this is an additional
discount to the invoice price aside from the trade discount which is given to
the buyer for early payment.

A

Cash discount

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24
Q

Cash discount is also called what?

A

Settlement discount,

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25
Q

RECORDING OF MERCHANDISING
TRANSACTIONS?

A

Purchasing and disbursement activities and Sales and collections activities

26
Q

An account used to record the cost of goods or merchandise bought for resale during the current reporting
period.

A

Purchases

27
Q

An account used to record the transport cost of the goods purchased.

A

Freight-in

28
Q

This is an adjunct account (addition) to the
purchases account

A

Freight-in

29
Q

An account used for the agreed reduction in the price of goods.

A

Purchase discount

30
Q

This is normally given by the supplier on
account of early payment.

A

Purchase discount

31
Q

Is a contra-account to the purchase account.

A

Purchase discount

32
Q

An account used to record the cost of merchandise returned to the supplier and including
price reductions to the purchase which is granted by a supplier on account of unsatisfactory goods delivered.

A

Purchase returns and allowances

33
Q

An account used to record advance payments made to a supplier for goods to
be purchased in the future.

A

Advances to supplier

34
Q

Purchases normal balance?

A

Debit

35
Q

Freight-in normal balance?

A

debit

36
Q

Purchase discount normal balance?

A

credit

37
Q

Purchase returns and allowances normal balance?

A

credit

38
Q

Advances to supplier normal balance?

A

Asset Account and debit

39
Q

Involves selling of
goods and collecting customers’ accounts.

A

sale and collection function

40
Q

An account used to record the selling price of goods to a customer.

A

Sales

41
Q

An account used to record the transport cost of the goods sold to customers.

A

Freight-out-

42
Q

If goods are purchased from
the business warehouse, customers normally what?

A

shoulder the freight of their goods.

43
Q

Freight-out may alternatively called what?

A

delivery expense.

44
Q

An account used to record the agreed reduction in the price of goods sold to customers.

A

Sales discount

45
Q

This is the equivalent a of purchase discount from the buyer’s perspective.

A

Sales discount

46
Q

Sales discountis the equivalent a of a _________ from the buyer’s perspective.

A

purchase discount

47
Q

An account used under a periodic inventory system to record the amount of sales returned
by customers including reductions in selling prices granted to customers because the merchandise was not satisfactory to a buyer.

A

Sales returns and allowances

48
Q

An account representing advance payment made by a customer for goods to be delivered in the
future.

A

Advances from customer

49
Q

Sales has a normal balance of?

A

credit

50
Q

Freight-out- has a normal balance of?

A

of an expense account or debit

51
Q

Sales discount has a normal balance of?

A

debit

52
Q

Sales returns and allowances has a normal balance of?

A

debit

53
Q

Advances from customer has a normal balance of?

A

credit

54
Q

Ownership to the goods transfer to
the buyer from the moment the goods leave the warehouse of the seller which is normally the shipping date or invoice date.

A

FOB shipping point

55
Q

Ownership to the goods transfer to the
buyer from the moment the goods arrive at the warehouse of the buyer which is normally the delivery receipt date.

A

FOB Destination

56
Q

the freight shall be paid by the
seller to the freight or cargo forwarder upon release
of the goods in his premises

A

Freight prepaid

57
Q

The freight shall be paid by the
buyer to the freight or cargo forwarder upon arrival
of the delivery in his premises

A

Freight collect

58
Q

Date of recognition of purchases for FOB destination

A

When the buyer
receives the goods

59
Q

Date of recognition of sales for FOB Destination

A

When the buyer
receives the goods

60
Q

Date of recognition of purchases for FOB shipping point

A

At the point of shipment

61
Q

Date of recognition of sales for FOB shipping point

A

At the point of shipment

2nd Semester (48 decks)

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