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Match the Following Definitions with the Appropriate Terms

Question 200

Matching

Match the following definitions with the appropriate terms

Premises:

Responses:

The abbreviation for free on board; refers to the point when ownership of goods passes to the buyer.

Acid-test ratio

A ratio used to assess a company's ability to pay its current liabilities; defined as quick assets divided by current liabilities.

Single-step income statement

Inventory losses that can occur as a result of theft or deterioration.

FOB

The catalog price of an item before any trade discount is deducted.

Merchandise inventory

An income statement format that shows detailed computations of net sales and other costs and expenses and reports subtotals for various classes of items.

General and administrative expenses

An income statement format that shows only one subtotal for total expenses.

EOM

The abbreviation for end-of-month; used to describe credit terms for some transactions.

Inventory shrinkage

Products a company owns and intends to sell.

Multiple-step income statement

The expenses of promoting sales by displaying and advertising merchandise, making sales and delivering goods to customers.

List price

Expenses that support overall operations and includes expenses related to accounting, human resource management and financial management.

Selling expenses

Premises:

The abbreviation for free on board; refers to the point when ownership of goods passes to the buyer.

A ratio used to assess a company's ability to pay its current liabilities; defined as quick assets divided by current liabilities.

Inventory losses that can occur as a result of theft or deterioration.

The catalog price of an item before any trade discount is deducted.

An income statement format that shows detailed computations of net sales and other costs and expenses and reports subtotals for various classes of items.

An income statement format that shows only one subtotal for total expenses.

The abbreviation for end-of-month; used to describe credit terms for some transactions.

Products a company owns and intends to sell.

The expenses of promoting sales by displaying and advertising merchandise, making sales and delivering goods to customers.

Expenses that support overall operations and includes expenses related to accounting, human resource management and financial management.

Responses:

Acid-test ratio

Single-step income statement

FOB

Merchandise inventory

General and administrative expenses

EOM

Inventory shrinkage

Multiple-step income statement

List price

Selling expenses

Correct Answer:

Premises:

Responses:

The abbreviation for free on board; refers to the point when ownership of goods passes to the buyer.

A ratio used to assess a company's ability to pay its current liabilities; defined as quick assets divided by current liabilities.

Inventory losses that can occur as a result of theft or deterioration.

The catalog price of an item before any trade discount is deducted.

An income statement format that shows detailed computations of net sales and other costs and expenses and reports subtotals for various classes of items.

An income statement format that shows only one subtotal for total expenses.

The abbreviation for end-of-month; used to describe credit terms for some transactions.

Products a company owns and intends to sell.

The expenses of promoting sales by displaying and advertising merchandise, making sales and delivering goods to customers.

Expenses that support overall operations and includes expenses related to accounting, human resource management and financial management.