Match the appropriate letter for the key term or concept to each definition provided (items 1–10). Note that not all key terms and concepts will be used.
|
a. |
Revenues |
k. |
Freight collect |
|
b. |
Realization |
l. |
Gross profit (or gross margin) |
|
c. |
Earned |
m. |
Gross profit ratio (or gross margin ratio) |
|
d. |
Sales |
n. |
Sales mix |
|
e. |
Sales returns and allowances |
o. |
Operating expenses |
|
f. |
Net sales |
p. |
Income from operations |
|
g. |
Shipping terms |
q. |
Gains |
|
h. |
FOB destination |
r. |
Income before income taxes |
|
i. |
FOB shipping point |
s. |
Net income |
|
j. |
Freight prepaid |
t. |
Income before extraordinary items |
1. Reductions in sales from product returns or adjustments in selling price.
2. A freight payment alternative meaning that freight is payable when the merchandise arrives at its destination.
3. The difference between gross profit and operating expenses.
4. The description of when title passes and whether buyer or seller is responsible for freight charges.
5. The difference between net sales and cost of goods sold.
6. A revenue recognition criterion that relates to the receipt of cash in exchange for the product or service.
7. Increases in net assets from incidental transactions and other events affecting an entity during a period except those that result from revenues of investments by owners.
8. The shipping term for passage of title from seller to buyer when the merchandise leaves the seller’s premises.
9. Gross sales less sales discounts and sales returns and allowances.
10. The shipping term for passage of title from seller to buyer when the merchandise arrives at its destination.