Question

Match the accounting terms with the corresponding definitions.

a.

The cost of the merchandise inventory that the business has sold to customers.

b.

An amount granted to the purchaser as an incentive to keep goods that are not "as ordered".

c.

A type of merchandiser that buys merchadise either from a manufacturer or a wholesaler and then sells those goods to customers.

d.

A situation in which the buyer takes ownership (title) at the delivery destination point.

e.

A type of merchandiser that buys goods from manufacturers and then sells them to retailers.

f.

A discount that businesses offer to purchasers as an incentive for early payment.

g.

A situation in which the buyer takes title to the goods after the goods leave the seller's place of business.

h.

The terms of purchase or sale as stated on the invoice.

i.

A seller's request for cash from the purchaser.

Terms:

Credit terms

FOB destination

invoice

cost of goods sold

purchase allowance

FOB shipping point

Wholesaler

purchase discount

retailer

Answer 1

Solution:

a. The cost of the merchandise inventory that the business has sold to customers - cost of goods sold

b. An amount granted to the purchaser as an incentive to keep goods that are not "as ordered" - purchase allowance

c. A type of merchandiser that buys merchadise either from a manufacturer or a wholesaler and then sells those goods to customers - retailer

d. A situation in which the buyer takes ownership (title) at the delivery destination point - FOB destination

e. A type of merchandiser that buys goods from manufacturers and then sells them to retailers - Wholesaler

f. A discount that businesses offer to purchasers as an incentive for early payment - Purchase discount

g. A situation in which the buyer takes title to the goods after the goods leave the seller's place of business - FOB shipping point

h. The terms of purchase or sale as stated on the invoice - Credit terms

i. A seller's request for cash from the purchaser - Invoice