Merchandising Term Flashcards
(27 cards)
What is a cash discount?
A discount on the final price after purchase if a retailer pays within a discount window, typically stated in days.
What does cost of goods sold (COGS) refer to?
An expense account that houses all costs associated with getting a product ready for sale.
What is Free on Board (FOB) destination point?
Transportation terms whereby the seller transfers ownership and financial responsibility at the time of delivery.
What does Free on Board (FOB) shipping point mean?
Transportation terms whereby the seller transfers ownership and financial responsibility at the time of shipment.
What is freight-in?
Costs the buyer is responsible for when receiving shipment from a seller.
What is freight-out?
Costs the seller is responsible for when shipping to a buyer.
What are goods in transit?
The time in which the merchandise is being transported from the seller to the buyer.
What is gross margin?
The amount available after deducting cost of goods sold from net sales, to cover operating expenses and profit.
What are gross purchases?
The original amount of the purchase without factoring in reductions for purchase discounts, returns, or allowances.
What are gross sales?
The original amount of the sale without factoring in reductions for sales discounts, returns, or allowances.
What is income from operations?
Gross margin less deductions for operating expenses.
What is a merchandising company?
A company that resells finished goods produced by a manufacturer (supplier) to customers.
What is net income?
When revenues and gains are greater than expenses and losses.
What are net purchases?
The outcome of purchase discounts, returns, and allowances deducted from gross purchases.
What are net sales?
The outcome of sales discounts, returns, and allowances deducted from gross sales.
What is an operating cycle?
The amount of time it takes a company to use its cash to provide a product or service and collect payment from the customer.
What are operating expenses?
Daily operational costs not associated with the direct selling of products or services.
What is a periodic inventory system?
A system that updates and records the inventory account at certain, scheduled times at the end of an operating cycle.
What is a perpetual inventory system?
A system that automatically updates and records the inventory account every time a sale or purchase of inventory occurs.
What is a physical inventory count?
A manual stock check of inventory to ensure recorded amounts match actual amounts in the warehouse and on the sales floor.
What is the point of transfer?
The moment when the responsibility for the inventory transfers from the seller to the buyer.
What are purchase discounts?
Incentives for retailers to pay early on their accounts, by issuing a reduced rate on their final purchase cost.
What are purchase returns and allowances?
When a retailer receives a partial or full refund from the manufacturer for defective merchandise.
What are sales discounts?
Reductions in the selling price offered to customers who pay their account within the discount period.
