Match the terms with the descriptions related to merchandise sales and purchases.
-Requires updating of the inventory account at the time of each purchase and each sale.
A)Transportation-in
B)Perpetual inventory system
C)Net purchasesd.
D)FOB Destination
E)Cost of goods available for sale
F)Periodic inventory system
G)FOB Shipping point
H)Delivery expense

Question

Quizplus · Accepted Answer

The perpetual inventory system requires updating of the inventory account at the time of each purchase and each sale.

Answer: C
 Net purchases refer to the total cost of purchases less any purchase returns, allowances, and discounts.

Answer: D
 FOB destination means that ownership of the goods passes to the buyer when they reach their destination. Any transportation costs incurred are the responsibility of the seller.

Answer: E
 Cost of goods available for sale is the sum of beginning inventory and net purchases, representing the total cost of goods that were available for sale during a certain period.

Answer: F
 The periodic inventory system involves taking a physical inventory count at the end of the period to determine the cost of goods sold and the ending inventory.

Answer: G
 FOB shipping point means that ownership of the goods passes to the buyer when they are shipped out. Any transportation costs incurred are the responsibility of the buyer.

Answer: H
 Delivery expense refers to the cost of transportation incurred for the delivery of goods to customers or from suppliers.

Match the Terms with the Descriptions Related to Merchandise Sales