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chapter 5
Special Issues for
Merchants
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1. Goods acquired by a retailer for resale to others is called .
2. The account is used strictly to record revenues that relate to cash and credit sales of merchandise.
3. Once a return or allowance is authorized, the seller documents the transaction on a form known as a .
4. The Sales Returns and Allowances account and the Sales Discount account are known as revenue accounts.
5. List price minus trade discounts equals .
6. A might be expressed as 2/10, n/30.
7. Beginning inventory plus net equals . The later amount less equals cost of goods sold. Sales minus cost of goods sold equals .
8. and are caused by factors such as arrival of merchandise in damaged condition, late arrival of ordered goods, and receipt of goods not ordered.
9. The account is unique to the gross method of recording purchases (in contrast to the net method).
10. Under the net method of recording purchases, a missed discount would be recorded to the Purchases Discounts Lost account with a at the time of .
11. If the buyer is to incur all freight charges, the terms are F.O.B. .
12. An inventory system which maintains up-to-date account balances for inventory at all times is termed a system.
13. An income statement approach which presents accounts by association (i.e., sales and cost of goods sold, etc.) is termed the format.
14. expenses are those associated with the sale of merchandise, and expenses are those pertaining to management of the business.
15. To minimize the probability of error occurrence and improve the credibility of financial statements and reports, features known as are built into accounting systems.
16. A company's represents the combined effect of many factors on implementing, evaluating, and improving the effectiveness of specified firm policies.
17. means that incompatible duties like transaction authorization, transaction recording, and asset custody are performed by different employees within an organization.
18. Important forms such as checks, sales invoices, and purchase orders are usually serially .