Match the following definitions and terms.

Question

A. Products a company owns and intends to sell.
B. Inventory losses that can occur as a result of theft or deterioration and require an adjusting entry to account for those losses.
C. The point of transfer from seller to buyer that takes place when the goods arrive at the buyer's place of business.
D. A measure of a company's ability to pay its current liabilities that excludes less liquid current assets such as inventory and prepaid expenses.
E. A given percent deducted from a list price often granted to customers purchasing large quantities of merchandise.
F. The point of transfer from seller to buyer that takes place when goods depart the seller's place of business.
G. An income statement format that shows detailed computations of net sales and other costs and expenses, and reports subtotals for various classes of items.
H. The expenses of promoting sales by displaying and advertising merchandise, making sales, and delivering goods to customers.
I. A widely used income statement format that lists cost of goods sold as another expense and shows only one subtotal for total expenses.
J. The expenses that support a company's overall operations and include costs related to accounting, human resource management and financial management.

Answer 1

A. Merchandise inventory
B. Inventory shrinkage
C. FOB destination
D. Acid-test ratio
E. Trade discount
F. FOB shipping point
G. Multiple-step income statement
H. Selling expenses
I. Single-step income statement
J. General and administrative expenses