Merchandising Flashcards
(35 cards)
What is Terms of Sale
Amount of time you have to pay for invoice
What is C.O.D
Payment must be made when goods are delivered
What is Receipt of Invoice
Payment is made when the invoice is received
What is Net 30
Full amount of invoice is due 30 days after invoice was delivered
What is EOM
Payment due by the end of the month
10th Following
Payment is due by the 10th day of the following month
What is 2/10, n/30
Get 2% discount if you pay within 10 days, but invoice is due in 30 days
What is 1/10, n/30, EOM
Get 1% discount if you pay within 10 days, but payment is due 30 days at the end of the month
What is a Merchandising Business
Buys goods and resells them at a higher price
What is a Manufacturing Business
Buy raw materials and converts them to a new product
What is Merchandise
Goods bought for resale
What is Merchandise Inventory
Accounts represent the total dollar value of goods on hand for sale (Current Asset if goods are in stock)
What is Periodic Inventory Method
Inventory is updated after the end of period
What is Physical Inventory
A count of all goods in hand
What is Perpetual Inventory Method
Continuously records change in merchandise on hand
Updates journal after item is purchased, sold, or returned
What is the formula for gross profit
GP = Revenue - COGS
What is COGS
Cost of Goods Sold; a record of all costs related to merchandise being sold
What is formula for net profit
NP = GP - Expenses
What is a schedule (in finance)
A supporting statement that provides details of an item on a main statement
What is the formula for COGS
COGS = Beginning Inventory + Purchases
COGS = CGAS - Ending Inventory
What is CGAS
Cost of Goods Available for Sale
What are purchases
Cost of Merchandise purchased for resale (expense account)
What are purchases returns & allowance (PRA)
Records goods purchased, then returned (contra expense account)
What are purchase discounts
When things get paid early, they usually offer discounts
