Chapter 4 Key Terms

Cards (16)

  • Merchandise
    Goods that a company owns and expects to sell to customers; also called merchandise inventory or inventory.
  • Merchandiser
    Entity that earns income by buying and selling merchandise.
  • Wholesaler
    Intermediary that buys products from manufacturers or other wholesalers and sells them to retailers or other wholesalers. 
  • Retailer
    Intermediary that buys products from manufacturers or wholesalers and sells them to consumers.
  • Cost of goods sold
    Cost of inventory sold to customers during a period; also called cost of sales.
  • Gross profit
    Net sales minus cost of goods sold; also calledgross margin.
  • Gross margin
    Net sales minus cost of goods sold; also called gross profit.
  • Gross profit
    Net sales minus cost of goods sold; also called gross margin.
  • Gross margin
    Net sales minus cost of goods sold; also called gross profit.
  • Merchandise inventory
    Goods that a company owns and expects to sell to customers; also called merchandise or inventory.
  • Inventory
    Goods a company owns and expects to produce and/or sell in its normal operations
  • Cost of goods sold
    Cost of inventory sold to customers during a period; also called cost of sales.
  • Perpetual inventory system
    Method that maintains continuous records of the cost of inventory available and the cost of goods sold.
  • Periodic inventory system
    records cost of goods sold at the end of the period
  • Credit terms
    Description of the amounts and timing of payments that a buyer (debtor) agrees to make in the future.
  • Gross method Method of recording purchases at the full invoice price without deducting any cash discounts