QS 4-1 (Algo) Applying merchandising terms LO CI, P1 Match each phrase with its definition. 1. 2 3 4. Cost of goods sold Refers to credit terms where goods in transit are owned by the buyer. Calculated as net sales minus cost of goods sold. A current asset that includes the cost to buy goods and make them ready for sale. Purchaser's description of a cash discount received from a supplier of goods. A type of business that earns income by buying and selling merchandise. Inventory is updated for purchases and sales of inventory only at the end of a period. Inventory is updated for each purchase and each sale of inventory The expense of purchasing and preparing the merchandise sold during a period. 5. 6. FOB shipping point Gross profit 7. Merchandise inventory 8