Chapter 5, Problem 5.20E

For all exercises, assume the perpetual inventory system is used unless stated otherwise. Round all numbers to the neraest whole dollar unless stated otherwise.

Using accounting vocabulary

Match the accounting terms with the corresponding definitions.

1. Credit Terms 2. FOB Destination 3. Invoice 4. Cost of Goods Sold 5. Net Sales Revenue 6. Purchase Allowance 7. FOB Shipping Point 8. Wholesaler 9. Purchase Discount 10. Retailer

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 merchandise either from a manufacturer or a wholesaler and then sells those goods to consumers. 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. The amount a company has made on sales of merchandise inventory after returns and allowances and discounts have been taken out. j. A seller's request for cash from the purchaser.