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Question 5

The following are some of the terms discussed in the chapter:

Match each term with the best description below. Each term may be used more than once, or may not be used at all.

(a) An expense account that shows the cost of merchandise sold

(b) A group of accounts that share a common characteristic, such as all inventory accounts

(c) An account, such as Sales Discounts, that is deducted from a revenue account on the income statement

(d) The return of unsatisfactory purchased merchandise

(e) Freight terms where the seller will pay for the cost of shipping the goods

(f) An inventory system where a physical inventory count is required to determine inventory on hand and establish cost of goods sold

(g) A reduction in price given to a customer for unsatisfactory inventory

(h) Sales revenue less cost of goods sold

(i) Revenues, expenses, gains, and losses that are not part of the company's main operations

(j) Freight terms where the buyer will pay for the cost of shipping the goods

(k) An inventory system where the cost of goods sold is calculated and recorded with every sales transaction

(l) An asset that shows the cost of goods purchased for resale

(m) Profit divided by net sales

(n) A price reduction given by a seller for early payment on a credit sale