#218. Match each of the following terms (a-q) with the correct definition below (14 points)

J

Freight

a.

Credit terms

k

Delivery Expense or Freight Out

b.

FOB destination

l

Inventory

c.

FOB shipping point

m

Sales discount

d.

Periodic inventory system

n

Purchases Returns and Allowances

e.

Perpetual inventory system

o

Debit memo

f.

Inventory shrinkage

p

Purchases discount

g.

Single-step income statement

q

Trade discount

h.

Multiple-step income statement

1.Account used to record inventory on hand under a perpetual inventory system.

2.Discount to government agencies or customers who purchase large quantities of merchandise.

3.The cost associated with delivery of merchandise to the customer when seller pays cost

4.Early payment discount offered to customers by the seller.

5. Losses of inventory due to theft, damage, spoilage, etc. that cause the actual inventory on hand to be less than that on record.

6.Statement where net income is determined by deducting all expenses from all revenues.

7.Account where returned merchandise or price adjustments are recorded by the buyer under the periodic inventory system.

8.Informs the seller of the reasons for the return of merchandise or the request for a price allowance.

9.Payment arrangements determined by the seller as to when invoices are due and whether early payment discount is offered.

10.Inventory system that updates the inventory account only at the end of the accounting period based on a physical count of inventory on hand.

11.Statement that includes subtotals for sales, gross profit, and income from operations in determining net income.

12.Inventory system that updates the inventory account for every purchase and sale transaction.

13.Expense account for recording shipping costs paid by the seller for purchased merchandise.

14.Shipping terms where the ownership of merchandise passes to the buyer when the seller delivers the merchandise to the freight carrier.