Solved

Match Each of the Following Term with the Correct Definition

Question 77

Matching

Match each of the following term with the correct definition below.

Premises:
Single-Step Income Statement
Perpetual Inventory system
Periodic Inventory system
FOB Destination
Credit terms
FOB Shipping Point
Inventory Shrinkage
Multiple-Step Income Statement
Responses:
Inventory system that updates the Merchandise Inventory account only at the end of the accounting period based on a physical count of merchandise on hand.
Shipping terms where the ownership of merchandise passes to the buyer when the buyer receives the merchandise.
Payment arrangements determined by the seller as to when invoices are due and whether early payment discount is offered.
Shipping terms where the ownership of merchandise passes to the buyer when the seller delivers the merchandise to the freight carrier.
Statement where net income is determined by deducting all expenses from all revenues.
Statement that includes subtotals for net sales, gross profit and net operating income in determining net income.
Losses of inventory due to theft, damage, spoilage, etc. that cause the actual inventory on hand to be less than that on record.
Inventory system that updates the Merchandise Inventory account for every purchase and sale transaction.

Correct Answer:

Single-Step Income Statement
Perpetual Inventory system
Periodic Inventory system
FOB Destination
Credit terms
FOB Shipping Point
Inventory Shrinkage
Multiple-Step Income Statement
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