Sales Discount : Sales discount is the discount given by the seller to the buyer when the buyer agrees to make the early payment of the goods he bought from the seller. Credit Period: It a time period which can pass before the payment is due. It is the time period agreed by both parties that are buyer and seller set up for credit terms. Discount Period: Time period in which the customer can avail the cash discount is called discount period. It is the period given to avail cash discount, if the buyer makes the payment in that due period. Free on Board (FOB) Destination: The ownership of the good is transferred after the goods are delivered to the buyers address. Seller has the full responsibility of the goods and has to reimburse the amount if any of the goods gets defected. Free on Board (FOB) Shipping Point: The ownership of the goods is transferred before the goods are shipped to the buyer. Here, the seller isn’t responsible if the goods get destroyed during the course of delivery. Gross Profit: Gross profit is the difference between net sales revenue of the business and the cost of goods sold incurred to earn that revenue. It is the profit after deducting the expenses and cost incurred by the company to make it and sell it afterwards. Merchandise Inventory : These are the goods that a company produces and owns and then sell them to the customers. It is an asset. The right amount of inventory helps to improve efficiency of the business. Purchases Discount : It is the discount offered by seller to avail it buyer’s promises to pay the amount in a certain time period decided by the seller. Cash Discount: It is the discount given by the seller in order to persuade the customer to make the payment in a certain time period. Trade Discount: It is the discount that is negotiates at the time of selling the goods. It is the discount given to those people who buy the goods or product in bulk such as retailers, whole sellers. To Identify: The letter for each definition.

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Chapter 4, Problem 1QS

To determine

Sales Discount:

Sales discount is the discount given by the seller to the buyer when the buyer agrees to make the early payment of the goods he bought from the seller.

Credit Period:

It a time period which can pass before the payment is due. It is the time period agreed by both parties that are buyer and seller set up for credit terms.

Discount Period:

Time period in which the customer can avail the cash discount is called discount period. It is the period given to avail cash discount, if the buyer makes the payment in that due period.

Free on Board (FOB) Destination:

The ownership of the good is transferred after the goods are delivered to the buyers address. Seller has the full responsibility of the goods and has to reimburse the amount if any of the goods gets defected.

Free on Board (FOB) Shipping Point:

The ownership of the goods is transferred before the goods are shipped to the buyer. Here, the seller isn’t responsible if the goods get destroyed during the course of delivery.

Gross Profit:

Gross profit is the difference between net sales revenue of the business and the cost of goods sold incurred to earn that revenue. It is the profit after deducting the expenses and cost incurred by the company to make it and sell it afterwards.

Merchandise Inventory:

These are the goods that a company produces and owns and then sell them to the customers. It is an asset. The right amount of inventory helps to improve efficiency of the business.

Purchases Discount:

It is the discount offered by seller to avail it buyer’s promises to pay the amount in a certain time period decided by the seller.

Cash Discount:

It is the discount given by the seller in order to persuade the customer to make the payment in a certain time period.

Trade Discount:

It is the discount that is negotiates at the time of selling the goods. It is the discount given to those people who buy the goods or product in bulk such as retailers, whole sellers.

To Identify: The letter for each definition.

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

1. Enter the letter for each term in the blank space beside the definition that it most closely matches. A. Sales discount B. Credit period C. Discount period D. FOB destination E. FOB shipping point F. Gross profit G. Merchandise inventory H. Purchase discount I. Cash discount J. Trade discount 1. Goods a company owns and expects to sell to its customers. 2. Time period that can pass before a customer's payment is due. 3. Seller's description of a cash discount granted to buyers in return for early payment. 4. Reduction below list or catalog price that is negotiated in setting the price of goods. 5. Ownership of goods is transferred when the seller delivers goods to the carrier. 6. Purchaser's description of a cash discount received from a supplier of goods. 7. Reduction in a receivable or payable if it is paid within the discount period. 8. Difference between net sales and the cost of goods sold. 9. Time period in which a cash discount is available. 10. Ownership of goods is…

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.