Retail Therapy
Sells merchandise that they have purchased from other companies to consumers
Retail Business
The terms for when payments for merchandise are to be made are called this
Credit terms
When a count of inventory is taken near
year-end to make sure that the quantity of inventory reported in the financial statements is accurate
Physical inventory
Cost flow is in the order in which the cost were incurred and the ending inventory is made up of the most recent purchases
FIFO
If merchandise purchased on account is returned, the buyer may inform the seller of the details by issuing this
Debit memo
Companies that sell the merchandise to retailers
Vendors
The allowed time for a buyer to pay
Credit period
This authorizes the purchase of the inventory from an
approved vendor
Purchase order
Cost flow is an average of the costs and in ending inventory is a weighted average of the purchase costs
Weighted average cost flow
If merchandise is purchased on account from a supplier for $1,000, terms FOB shipping point, 1/10, n/30, and the seller prepays $50 in freight, the amount of the discount for early payment would be
$10
When merchandise is sold, the revenue is reported as sales, and its cost is recognized as an expense called this
Cost of goods sold
This provides the customer a discount when purchasing a product
Coupon
This provides a record of the amount of inventory available and helps keep inventory quantities at proper levels
Subsidiary inventory ledger
Cost flow is in the reverse order in which the costs were incurred and in ending inventory is a weighted average of the purchase costs
LIFO
The income statement in which the total of all expenses is deducted from the total of all revenues is termed this
Single-step form
Sales - Cost of Goods Sold = This
Gross profit
The ownership of the merchandise passes to the buyer when the seller delivers the merchandise to the freight carrier
FOB Shipping Point
The following documents are often used for inventory control: purchase order, receiving report, and this
Vendor's invoice
The unit sold is identified with a unique purchase. The ending inventory is made up of the remaining units on hand
Specific Identification inventory cost flow
If inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is
FIFO
There are two systems for accounting for merchandise transactions
Perpetual and periodic inventory system
In your words, what does this mean: 3/10, n/EOM
A 3% discount is received if paid in full within 10 days; if no discount is taken, payment due at end of the month
The two primary objectives of control over inventory
Safeguarding and reporting
When identical units of merchandise are
acquired at different unit costs during a period, an accounting issue arises that is solved by this
Inventory cost flow assumption
Periodic inventory cost flow system