Match each definition with the term that best describes it. An income measure that includes gains and [ Choose ] losses that are excluded from the [Choose ] Sales revenue (Sales) Expenses incurred in the process of earning sales revenue. determination of net income. An account that is offset against a revenue Contra revenue account account on the income statement. Cost of goods sold Periodic inventory system FOB destination The total cost of merchandise sold during the Comprehensive income FOB shipping point Perpetual inventory system period. An inventory system under which the [ Choose ] company does not keep detailed inventory records throughout the accounting period but determines the cost of goods sold only at the end of an accounting period. An inventory system under which the [ Choose ] company keeps detailed records of the cost of each inventory purchase and sale, and the records continuously show the inventory that should be on hand. The primary source of revenue in a [ Choose ] merchandising company. Freight terms indicating that the seller places [ Choose ] the goods free on board to the buyer's place of business, and the seller pays the freight. Freight terms indicating that the seller places [ Choose ] goods free on board the carrier, and the buyer pays the freight costs. > > > >
Match each definition with the term that best describes it. An income measure that includes gains and [ Choose ] losses that are excluded from the [Choose ] Sales revenue (Sales) Expenses incurred in the process of earning sales revenue. determination of net income. An account that is offset against a revenue Contra revenue account account on the income statement. Cost of goods sold Periodic inventory system FOB destination The total cost of merchandise sold during the Comprehensive income FOB shipping point Perpetual inventory system period. An inventory system under which the [ Choose ] company does not keep detailed inventory records throughout the accounting period but determines the cost of goods sold only at the end of an accounting period. An inventory system under which the [ Choose ] company keeps detailed records of the cost of each inventory purchase and sale, and the records continuously show the inventory that should be on hand. The primary source of revenue in a [ Choose ] merchandising company. Freight terms indicating that the seller places [ Choose ] the goods free on board to the buyer's place of business, and the seller pays the freight. Freight terms indicating that the seller places [ Choose ] goods free on board the carrier, and the buyer pays the freight costs. > > > >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:**Matching Definitions and Terms in Accounting**
This exercise requires matching each given definition with its corresponding accounting term. Here are the definitions and options provided:
1. **Definition**: An income measure that includes gains and losses that are excluded from the determination of net income.
- **Options**:
- Sales revenue (Sales)
- Expenses incurred in the process of earning sales revenue
- Contra revenue account
- Cost of goods sold
- Periodic inventory system
- FOB destination
- Comprehensive income
- FOB shipping point
- Perpetual inventory system
2. **Definition**: An account that is offset against a revenue account on the income statement.
3. **Definition**: The total cost of merchandise sold during the period.
4. **Definition**: An inventory system under which the company does not keep detailed inventory records throughout the accounting period but determines the cost of goods sold only at the end of an accounting period.
5. **Definition**: An inventory system under which the company keeps detailed records of the cost of each inventory purchase and sale, and the records continuously show the inventory that should be on hand.
6. **Definition**: The primary source of revenue in a merchandising company.
7. **Definition**: Freight terms indicating that the seller places the goods free on board to the buyer's place of business, and the seller pays the freight.
8. **Definition**: Freight terms indicating that the seller places goods free on board the carrier, and the buyer pays the freight costs.
Each definition requires the selection of the most appropriate term from the options provided to accurately complete the statement.
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