Ch. 4 Define - perpetual inventory, selling expenses, administrative expenses, revenue account for a merchandising business Credit terms - know parts JE - purchase inventory, pay for inventory with or without discount Freight terms - FOB shipping point, FOB destination - who is responsible for paying the freight JE - sell inventory (sales JE and cost JE) - with or without discount New accounts - normal balance, what type of account and where in financial statements Be able to calculate gross profit, income from operations, net sales, cost of goods sold NOTE: periodic inventory is not on the exam Ch. 5 2 most widely used methods of accounting for inventory costs FIFO, LIFO - be able to calculate cost of merchandise sold, ending merchandise inventory, gross profit which are sold first under each method what is ending inventory made up of under each method order of flow of costs under each method which method results in greatest cost of merchandise sold which has highest net income defin. of lower of cost or market, specific identification damaged inventory is valued at