accounting
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13 Terms
1
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What is a merchandising company?
Sells good/merchandise.
2
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When is inventory updated?
Periodic, end of month, perpetual after every sale.
3
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Sales Revenue less the cost of goods sold equals?
Gross profit.
4
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Under the periodic and perpetual inventory system sale of merchandise account?
Perpetual = Merch inventory
Periodic = Purchases - Purchases R/A - Purchase Discounts = Net Purchases
Periodic = Purchases - Purchases R/A - Purchase Discounts = Net Purchases
5
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Entry if physical count of inventory is less than the actual under periodic and perpetual system?
DR = Cost of Goods Sold
CR = Merchandise inventory
CR = Merchandise inventory
6
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Who is freight paid by if the terms are FOB Shipping point or FOB Destination?
FOB Destination > Seller
FOB Ship > Purchaser
FOB Ship > Purchaser
7
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What is quantity discount and how to record?
500 QTY x 0.09
DR = Merchandise Inventory
CR = A/P
DR = Merchandise Inventory
CR = A/P
8
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What is freight recorded by the seller?
Freight out.
9
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Calculate gross profit margin and profit margin?
GPM = (Gross Profit/Net Sales) x 100
PM = (Operative Profit/Net Sales) x 100
PM = (Operative Profit/Net Sales) x 100
10
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What appears on the multi-step and single-step income statement?
11
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What does profit margin measure?
Profitability of a company.
12
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Calculate cost of goods purchased?
Beginning Inventory + Net Purchases + Freight In
13
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How to calculate cost of goods sold?
Cost of Goods -Ending Inventory