Match the following Requires a physical count of goods on hand to calculate cost of goods sold Freight terms which require the seller to pay the freight cost Deducted from net sales to calculate gross profit 1. Net sales 2. A calculation of gross profit divided by net sales Freight out 3. Subsidiary account Freight terms which required the buyer to pay the freight cost 4. Cost of goods purchased 5. Purchase discount Sales less sales returns and allowances and sales discounts 6. Cost of goods sold A discount provided to encourage early payment 7. Periodic inventory system 8. Perpetual inventory system 3. Subsidiary account Freight terms which required the buyer to pay the freight cost 4. Cost of goods purchased 5. Purchase discount Sales less sales returns and allowances and sales discounts 6. Cost of goods sold 7. Periodic inventory system A discount provided to encourage early payment 8. Perpetual inventory system Freight cost to deliver goods to customers reported as an operating expense 9. FOB destination 10. Gross Profit Margin The merchandise inventory account balance should equal ending inventory, at all times 11. FOB shipping point Separate account maintained for each different product Debits to Merchandise Inventory