Chapter 7, Problem 7.5E

Enter the letter for each term in the blank space beside the definition that it most closely matches. A. Sales discount D. FOB destination G. Merchandise inventory B. Credit period E. FOB shipping point H. Purchases discount C. Discount period F. Gross profit 1. Goods a company owns and expects to sell to its customers. 2. Time period that can pass before a customer’s full payment is due. 3. Seller’s description of a cash discount granted to buyers in return for early payment. 4. Ownership of goods is transferred when the seller delivers goods to the carrier. 5. Purchaser’s description of a cash discount received from a supplier of goods. 6. Difference between net sales and the cost of goods sold. 7. Time period in which a cash discount is available. 8. Ownership of goods is transferred when delivered to the buyer’s place of business.

Under the realization principle, revenue from sale of products is recognized a. At date of delivery to the customers                              C.  When the customers are billed b. When the inventories are readied for shipment          D.  Upon receipt of cash payment

The authority to accept incoming goods in receiving should be based on a(n)(1) vendor’s invoice. (3) bill of lading.(2) purchase requisition. (4) approved purchase order.