Ch. 6 Terms and concepts
Inventory for a merchandiser
Acquired goods for resale
periodic inventory system
updates the inventory records for merchandise purchases,sales,and returns only at the end of the counteracting period.
Perpetual inventory system
updates inventory records every time an item is bought, sold,or returned.
The entry to record a sales return that results in the issuing of a gift card is recorded with a debit to Sales Revenue and a credit to _________________ and also a debit to _________________ and a credit to CSG.
Deferred Rev and inventory.
____________ income statement shows how much profit is earned from product sales without being clouded by other operating expenses and separates other items that are not core to the operations of the company.
Multistep
Gross profit equation
Net Sales- Cost of goods sold
order of income statement line
Sales revenue Sales Returns, allowances and discounts Net Sales CGS GP
What account will require a credit to the inventory account in a perpetual inventory system?
Selling inventory on account/ cash
Purchase transactions affect the ___________
balance sheet and not the income statement
Merchandisers record rev when they
fulfill their performance obligations by transferring control of the goods to customers.
the __________ cycle is a series of activities that the company undertakes to generate sales and ultimately cash.
operating
If a seller sells its merchandise with the shipping terms FOB destination, it credits Revenue when the merchandise is_______.
received by the customer.
what accounts will credit to inventory account in a perpetual inventory sys?
selling inventory for cash and on account
If sales returns and allowances are a large dollar amount relative to initial sales revenue, it may mean
there are produce quality issues