Match the following terms with the appropriate definition.

Question

A. A notification that informs the seller of a debit made to the seller's account payable in the buyer's records.
B. The calculation of net sales less cost of goods sold.
C. The description of the amounts and timing of payments from a buyer to a seller for a purchase.
D. A notification that informs a buyer of a seller's credit to a buyer's account.
E. An inventory accounting method that continually updates accounting records for inventory available for sale and inventory sold.
F. A cash discount granted from the view of the seller, indicated in the credit terms on the invoice.
G. The time period in which reduced payment can be made by the buyer because of a cash discount offered by a seller of goods on credit.
H. The amount of time allowed before full payment is due.
I. A cash discount granted, from the view of the purchaser intended to encourage buyers to pay amounts owed earlier.
J. An inventory accounting method that updates the accounting records for merchandise transactions only at the end of a period.

Answer 1

A. Debit memorandum
B. Gross profit
C. Credit terms
D. Credit memorandum
E. Perpetual inventory system
F. Sales discount
G. Discount period
H. Credit period
I. Purchase discount
J. Periodic inventory system