Periodic Inventory Method Perpetual Inventory Method Purchase Requisition

• ��������� (Periodic Inventory Method) • ��������� )Perpetual Inventory Method(

• ���� (Purchase Requisition) • ����� (Purchase Order) • ������� (Invoice) • ���� (Receiving Report) • ���� (Debit / Credit Memorandum)

• FOB Shipping Point = Ownership of the goods passes to the buyer when the public carrier accepts the goods from the seller. )Weygandt, Jerry J. , Kieso, Donald E. , and Kimmel, Paul D. Accounting Principles 5 th Edition John Wiley & Sons, Inc. p. 368(

• FOB Destination = Legal title to the goods remains with the seller until the goods reach the buyer. )Weygandt, Jerry J. , Kieso, Donald E. , and Kimmel, Paul D. Accounting Principles 5 th Edition John Wiley & Sons, Inc. p. 368(

• A discount from list price offered to all customers of a given type; contrast with a discount offered for prompt payment and quantity discount )Sidney Davidson, Clyde P. Stickney, and Roman L. Weil, Accounting: the Language of Business, Seventh Edition, Thomas Horton and Daughters, 1987, p. 78(

• A reduction in sales or purchase price allowed for prompt payment. )Sidney Davidson, Clyde P. Stickney, and Roman L. Weil, Accounting: the Language of Business, Seventh Edition, Thomas Horton and Daughters, 1987, p. 17(

• A reduction in purchase invoice price granted for prompt payment. )Sidney Davidson, Clyde P. Stickney, and Roman L. Weil, Accounting: the Language of Business, Seventh Edition, Thomas Horton and Daughters, 1987, p. 62(

• A reduction in sales invoice price usually offered for prompt payment. )Sidney Davidson, Clyde P. Stickney, and Roman L. Weil, , Accounting: the Language of Business, Seventh Edition, Thomas Horton and Daughters, 1987, p. 71)

• The cost of freight or shipping incurred in acquiring inventory, preferably treated as a part of the cost of inventory. )Sidney Davidson, Clyde P. Stickney, and Roman L. Weil, , Accounting: the Language of Business, Seventh Edition, Thomas Horton and Daughters, 1987, p. 38)

• The cost of freight or shipping incurred in selling inventory, treated by the seller as a selling expense in the period of sale. )Sidney Davidson, Clyde P. Stickney, and Roman L. Weil, , Accounting: the Language of Business, Seventh Edition, Thomas Horton and Daughters, 1987, p. 38)

• �������� (Sales Return and Allowances)

• �������� (Purchases Return and Allowances)

• ������ (credit terms) • 2/10, n/30 = two-ten, net thirty = 2% cash discount may be taken on the invoice price date (the discount period); otherwise, the invoice price less any return or allowances is due 30 days from the invoice date. )Weygandt, Jerry J. , Kieso, Donald E. , and Kimmel, Paul D. Accounting Principles 5 th Edition John Wiley & Sons, Inc. p. 193(

• ������ (credit terms) • 1/10 EOM = one-ten, end-of-month = 1% discount is available if the invoice is paid within the first 10 days of the next month. )Weygandt, Jerry J. , Kieso, Donald E. , and Kimmel, Paul D. Accounting Principles 5 th Edition John Wiley & Sons, Inc. p. 193(

• not to offer a cash discount for prompt payment • ������ (credit terms) • n/30 • n/60 • n/10 EOM )Weygandt, Jerry J. , Kieso, Donald E. , and Kimmel, Paul D. Accounting Principles 5 th Edition John Wiley & Sons, Inc. p. 194(

• The sequence of accounting procedures starting with journal entries for various transactions and events and ending with the financial statements or, perhaps, the postclosing trial balance. )Sidney Davidson, Clyde P. Stickney, and Roman L. Weil, , Accounting: the Language of Business, Seventh Edition, Thomas Horton and Daughters, 1987, p. 6)