Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition

EXERCISE 5-11

Purpose: (L.O. 1 thru 7) This exercise will quiz you about terminology used in this chapter.

A list of accounting terms with which you should be familiar appear below.

Contra revenue account	Other revenues and gains
Cost of goods sold	Periodic inventory system
FOB destination	Perpetual inventory system
FOB shipping point	Purchase allowance
Gross profit	Purchase discount
Gross profit rate	Purchase invoice
Income from operations	Purchase return
Multiple-step income statement	Sales discount
Net sales	Sales invoice
Nonoperating activities	Sales returns and allowances
Operating expenses	Sales revenue (Sales)
Other expenses and losses	Single-step income statement

Instructions

For each item below, enter in the blank the term that is described.

1. ______________________________________Freight terms indicating that the goods will be placed free on board for the buyer's place of business, and the seller pays the freight costs.
2. ______________________________________Freight terms indicating that goods are placed free on board the carrier by the seller, and the buyer pays the freight costs.
3. ______________________________________Primary source of revenue in a merchandising company.
4. ______________________________________Sales less sales returns and allowances and sales discounts.
5. ______________________________________The total cost of merchandise sold during the period. A synonymous term is cost of sales.
6. ______________________________________The excess ...