FABM AT

Gross profit

________ (GP) is equal to Sales Revenue less the Cost of Goods Sold.

Cost of goods

________ sold- refers to all the expenses in merchandising company that represents what the seller paid for the inventory it has sold.

Purchases

________- A cost account that refers to the gross amount of merchandise bought from the supplier.

Sales Return & Allowances

________- this is debited for merchandise sold either in cash wrong order, etc.

service company

Unlike ________, the merchandising's source of earning money is from selling of goods or products.

merchandise inventory

Merchandise (or ________) refers to goods that are held for sale to customers in the normal course of business.

Purchase Returns and Allowances

________- this is credited for merchandise purchased either in cash or credit that were return to supplier for reasons such as bad orders, etc.

Purchases

________- this is debited when merchandise are ________ either in cash or credit.

It buys and sells goods

it does not make its own product but it gets its items for resale from a supplier

For example

Candies, canned goods, noodles sold at grocery stores Juice, biscuits sold in a grocery store Medicines sold in a pharmacy, Clothes sold in a boutique

Operating expenses (OP)

expenses incurred in the process of earning sales revenue that are deducted from gross profit in the income statement

Cost of goods sold

refers to all the expenses in merchandising company that represents what the seller paid for the inventory it has sold

The purchased goods

are called merchandise inventory, the most important asset of a Merchandise Business since it is the source of Revenue when sold to the customers

Sales

The term for the revenue when a merchandise is sold to customer

Merchandise Inventory-End

this refers to unsold merchandise at the end of the accounting period as determined by the physical count or inventory taking

Sales

this is credited for merchandise that are sold either in cash or on credit as follows;

Sales Discounts

debited for sales discounts given to customer, normally given for early collection

Sales Return & Allowances

this is debited for merchandise sold either in cash wrong order, etc

Purchases

this is debited when merchandise are purchased either in cash or credit

Purchase Discounts

this is credited when discount is availed from supplier for early payment or merchandise purchased on credit

Purchase Returns and Allowances

this is credited for merchandise purchased either in cash or credit that were return to supplier for reasons such as bad orders, etc

Transportation-Out/Freight-Out

this account id debited for freight and handling charges of merchandise sold to customers and shipped via land, sea and air transportation