Accounting- Chapter 6

What is the second FOB Shipping Point

Buyer pays the freight

The amount that was paid to purchase merchandise that has been sold to customers

Cost of Goods Sold

The seller pays for freight when goods are shipped

FOB Destination

The buyer pays for freight when goods are shipped

FOB Shipping Point

Service businesses purchase goods that they later sell to customers

False

The amount of revenue earned by selling merchandise less the amount originally paid to acquire the goods

Gross Profit

What is the only common thing that both multiple and single income statement shows?

Net income

The total amount of revenue earned by selling merchandise

Sales

Which accounts are used by both merchandising and service businesses?

Supplies Inventory Accounts Payable Rent Expense

What is the first FOB Destination

Title of the goods passes to the buyer when the goods are received

What is the first FOB Shipping Point

Title of the goods passes to the buyer when the goods are shipped

Both merchandising and service businesses usually include a Supplies Expense account in their accounting records.

True

Accounts payable is

a liability

Accounts receivable is

an asset

Merchandise inventory is

an asset

Cost of goods sold is an

expense

Sales is a

revenue

FOB Shipping Point means that

title to goods transfers from seller to buyer when the goods leave the seller's place of business.

Unsold goods that a business still holds

Merchandise Inventory

What is the second FOB Destination

Seller pays the freight

Sales

The total amount of revenue earned by selling merchandise

Merchandising businesses purchase goods that they later sell to customers

True