Question Details

Business A 654 CHAPTER 5 PART 13

CHAPTER 5 ACCOUNTING FOR MERCHANDISING OPERATIONS

COMPLETION STATEMENTS

	227.	A ________________ buys and sells goods rather than performing services to earn a profit.

	228.	Cost of goods sold is deducted from net sales revenue for the period in order to arrive at ________________.


	229.	Inventory on hand can be obtained from detailed inventory records when a ________________ inventory system is maintained.


	230.	The acquisition of inventory is debited to the ____________ account when a perpetual inventory system is used.


	231.	The freight cost incurred by a seller to deliver goods sold to a customer is called ________________.


	232.	When a customer returns merchandise previously purchased on credit, the entry for the seller to record the return requires a debit to the ________________ account and a credit to the ________________ account.


	233.	Sales Returns and Allowances and Sales Discounts are both ______________ accounts and have _______________ normal balances.


234.	Every sales transaction should be supported by a ________________ that provides written evidence of the sale.


	235.	Gross profit is obtained by subtracting ________________ from ________________.


	236.	Income from operations is determined by subtracting total operating expenses from ________________.



MATCHING
237.	Match the items below by entering the appropriate code letter in the space provided.

	A.	Net sales	F.	FOB shipping point
	B.	Sales discounts	G.	Freight-out
	C.	Purchase invoice	H.	Gross profit
	D.	Periodic inventory system	I.	Operating expenses
	E.	FOB destination	J.	Income from operations

		1.	An incentive to encourage customers to pay their accounts early.
		2.	Expenses incurred in the process of earning sales revenue.
		3.	Freight terms that require the seller to pay the freight cost.
		4.	Sales revenue less sales returns and allowances and sales discounts.
		5.	A document that supports each credit purchase.
		6.	Net sales less cost of goods sold.
		7.	Freight cost to deliver goods to customers reported as a selling expense.
		8.	Requires a physical count of goods on hand to compute cost of goods sold.
		9.	Gross profit less total operating expenses.
		10.	Freight terms that require the buyer to pay the freight cost.