IDIS 240 Final Exam – Vestal Questions and
Correct Answers
Cash Flow
Cash in bank > purchased inventory > sold inventory > accounts receivable > cash in bank
List Price
The retail price listed
selling price
list price - trade discounts
Net price
= selling price - allowable discounts (cash discounts)
Net Sale
Cost of Good Sold (COGS)
= Cost of Merchandise + Freight from Manufacturer
Trade Discounts
specify term of sale and change of price with how they see fit.
Cash Discounts
given to encourage buyers to promote payment promptly.
Special Orders
instructions given by the buyer on how to deliver or manufacture the order.
Minimum Order vs. Freight Allowed
,Minimum order:
The minimum amount you can order from a manufacturer
Freight Allowed:
manufacture pays for the shipping and just adds to the cost.
Claims
request for payment from the insurance company to cover financial losses.
Returns
goods returned to the business that sold them
Operating Expense (OE)
all costs needed to provide necessary services.
SG&A
Selling, General and Administrative Expense
EBITDA: Earnings before interest, Taxes, depreciation, and amortization
= Margin - OE - SG&A
EBIT
EBITDA - Depreciation and Amortization
Interest Expense
Not part of operating cost
NPBT
Net profit before taxes
, NPAT
Net profit after taxes
Accounts payable
Money the distributor owes the manufacturer
Accounts Receivable
money the customer owes us
Days Sales Outstanding
Receivable Dollars * (365/sales)
Inventory
What we have on hand to sell
Inventory Turn
= (COGS from inventory / Average Warehouse Inventory)
Gross Margin Return on Inventory Investment (GMROII)
= (Gross Margin Dollars Earned on Warehouse Sales/ Average Warehouse inventory)
COGS
= Cost of Merchandise + Freight from Manufacturer
FOB Destination
manufacturer pays for the freight
FOB Shipping Point
distributor pays for the freight
Correct Answers
Cash Flow
Cash in bank > purchased inventory > sold inventory > accounts receivable > cash in bank
List Price
The retail price listed
selling price
list price - trade discounts
Net price
= selling price - allowable discounts (cash discounts)
Net Sale
Cost of Good Sold (COGS)
= Cost of Merchandise + Freight from Manufacturer
Trade Discounts
specify term of sale and change of price with how they see fit.
Cash Discounts
given to encourage buyers to promote payment promptly.
Special Orders
instructions given by the buyer on how to deliver or manufacture the order.
Minimum Order vs. Freight Allowed
,Minimum order:
The minimum amount you can order from a manufacturer
Freight Allowed:
manufacture pays for the shipping and just adds to the cost.
Claims
request for payment from the insurance company to cover financial losses.
Returns
goods returned to the business that sold them
Operating Expense (OE)
all costs needed to provide necessary services.
SG&A
Selling, General and Administrative Expense
EBITDA: Earnings before interest, Taxes, depreciation, and amortization
= Margin - OE - SG&A
EBIT
EBITDA - Depreciation and Amortization
Interest Expense
Not part of operating cost
NPBT
Net profit before taxes
, NPAT
Net profit after taxes
Accounts payable
Money the distributor owes the manufacturer
Accounts Receivable
money the customer owes us
Days Sales Outstanding
Receivable Dollars * (365/sales)
Inventory
What we have on hand to sell
Inventory Turn
= (COGS from inventory / Average Warehouse Inventory)
Gross Margin Return on Inventory Investment (GMROII)
= (Gross Margin Dollars Earned on Warehouse Sales/ Average Warehouse inventory)
COGS
= Cost of Merchandise + Freight from Manufacturer
FOB Destination
manufacturer pays for the freight
FOB Shipping Point
distributor pays for the freight
