Chapter 5 warm-up

Situation in which the buyer takes ownership to the goods when the goods leave the seller's place of business

The transportation cost to ship goods out of the seller's warehouse; therefore, it is freight on goods sold to a custome

The transportation cost to ship goods to the purchaser's warehouse; therefore, it is freight on purchased goods.

Credit Terms:The payment terms of purchase or sale as stated on the invoice.

Income Tax Expense: Measures the profitability of each sales dollar above the cost of goods sold.

A reduction in the amount owed by a customer due to the return of merchandise.

A business that sells merchandise, or goods, to customers.

A type of merchandiser who buys goods from manufacturers and then sells them to retailers.

A discount that businesses offer to purchasers as an incentive for early payment.

Operating Income: Operating expenses related to marketing and selling the company's goods and services.

Expenses, other than Cost of Goods Sold, that are incurred in the entity's major ongoing operations.