FACC Exam 2 Prep: Chapter 6 Study
Guide.
1. operating cycle A series of activities that a company undertakes to generate revenues.
2. inventory reports the merchandiser's total cost of acquiring goods that it has not
yet sold
1/
8
, FACC Exam 2 Prep: Chapter 6 Study
Guide.
3. Sales Revenue Total selling price of all goods that the merchandiser sold to customers
during the period
4. cost of total cost of all goods that the merchandiser sold to customers during the
goods sold period
5. gross profit sales revenue - cost of goods sold
6. begin. cost of goods sold
inventory
+ purchases -
ending
inventory
= updates inventory records for merchandise purchases, sales, and returns
at the end of each accounting period
7. periodic
invento- ry updates inventory records every time an item is bought, sold, or returned
system
8. perpetual
inven- tory
system
9. shrinkage loss of inventory from theft, fraud, and error. Easier to detect in a
perpetual
inventory system
10. purchase granted by suppliers when you pay accounts payable within a specified
dis- counts time period
11. FOB
shipping record the sale when the goods leave the seller
point
12. FOB destination record the sale when the goods reach the
2/
8
Guide.
1. operating cycle A series of activities that a company undertakes to generate revenues.
2. inventory reports the merchandiser's total cost of acquiring goods that it has not
yet sold
1/
8
, FACC Exam 2 Prep: Chapter 6 Study
Guide.
3. Sales Revenue Total selling price of all goods that the merchandiser sold to customers
during the period
4. cost of total cost of all goods that the merchandiser sold to customers during the
goods sold period
5. gross profit sales revenue - cost of goods sold
6. begin. cost of goods sold
inventory
+ purchases -
ending
inventory
= updates inventory records for merchandise purchases, sales, and returns
at the end of each accounting period
7. periodic
invento- ry updates inventory records every time an item is bought, sold, or returned
system
8. perpetual
inven- tory
system
9. shrinkage loss of inventory from theft, fraud, and error. Easier to detect in a
perpetual
inventory system
10. purchase granted by suppliers when you pay accounts payable within a specified
dis- counts time period
11. FOB
shipping record the sale when the goods leave the seller
point
12. FOB destination record the sale when the goods reach the
2/
8
