A business that buys goods and sells them at a profit is called this.
What is a merchandising business?
100
There are two aspects of Merchandise Inventory- goods that are sold and goods not sold. The goods not sold are accounted for on this financial statement.
What is the balance sheet.
100
The merchandise inventory is kept in these two accounts.
What are the Merchandise Inventory Account and the Purchases Account
100
These are the three new accounts that appear on the worksheet of a merchandising business
What are Merchandise Inventory, Freight In, Purchases
100
This inventory method is one in which the cost of the inventory sold is determined only at the end of each fiscal period. This is the older inventory system and is determined manually.
What is the periodic Inventory Method?
200
This term is used to describe a business that buys goods from manufacturers (like clothes) and sells them to shops (like West 49).
What is a wholesaler?
200
Goods that ARE sold are accounted for on this financial statement.
What is the income statement?
200
The merchandise inventory account is this type of account (asset, liability, equity, revenue, expense)
What is an Asset Account?
200
This note is a "minus" invoice issued by the vendor to reverse a charge that was previously made on a regular sales invoice
What is credit invoice?
200
This inventory method is one in which a detailed record of items in stock is kept up to date on an ongoing basis through a computer system. Yay for scanners!
What is the perpetual inventory system?
300
This type of business buys goods from a supplier (like flowers) and sells them in their own shop (like a florist)
What is a retailer?
300
As the year goes by, inventory is sold and the business has to stock up again. This term is used to describe that top up of goods.
What is Merchandise Purchased?
300
The purchases account is this type of account (asset, liabilities, equity, expense, revenue)
What is an expense account?
300
These are the three reasons a credit note would be issued.
What is
1. goods are defective
2. goods prove to be less than satisfactory
3. an error is made on the original sales invoice
300
These are two major benefits for using the more modern method of inventory systems.
What is
1. Up to the minute inventory information is available.- Easier and quicker to use
2. Can determine a total inventory at any time
400
The quantity of goods on hand is known as stock-in-trade or this.
What is merchandise inventory?
400
This is the equation to find the cost of ending inventory.
What is
cost of beginning inventory + cost of merchandise purchased - cost of merchandise sold = Cost of ending inventory
400
The revenue account for merchandising business is called this.
What is "sales"?
400
This term is used to describe the return of money (cash) to the buyer from the seller when merchandise is returned
What is cash refund?
400
These is the main disadvantage for using the more modern inventory system.
What is
1. It does not take into account lost, damaged or stollen goods
500
Unlike goods that are meant to be sold for a profit, a business also carries goods to be used to benefit the workings of business. These goods are called this.
What are supplies?
500
To find out how much profit is made from the selling of goods or cost of merchandise sold, this equation is used.
What is
Cost of beginning inventory + cost of merchandise purchased - cost of ending inventory = cost of merchandise sold
500
This account is used to accumulate any transportation charges on incoming goods.
What is the freight in account?
500
Returns and Allowances are accounted for on this financial statement.
What is the income statement?
500
(Tricky Questions Warning) The importance of checking up on the information that goes into the computer is sometimes expressed by the acronym "GIGO" which stands for this.