Insert the letter for each term in the blank space beside the definition that it most closely matches.

A. Cash discount E. FOB shipping point H. Purchase discount B. Credit period F. Gross profit I. Sales discount C. Discount period G. Merchandise inventory J. Trade discount D. FOB destination _____ 1 Reduction below list or catalog price that is negotiated in setting the price of goods.

_____ 2 Reduction in a receivable or payable if it is paid within the discount period.

_____ 3 Time period that can pass before a customer’s payment is due.

_____ 4 Difference between net sales and the cost of goods sold.

_____ 5 Ownership of goods is transferred when the seller delivers goods to the carrier.

_____ 6 Ownership of goods is transferred when delivered to the buyer’s place of business.

_____ 7 Goods a company owns and expects to sell to its customers.

_____ 8 Purchaser’s description of a cash discount received from a supplier of goods.

_____ 9 Seller’s description of a cash discount granted to buyers in return for early payment.

_____ 10 Time period in which a cash discount is available.