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Accounting I
Chapter 4 Key Terms
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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 called
gross 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