Bus-A200 Exam 2 Exam with
complete solutions latest version
multiple step income statement - CORRECT ANSWER-sales revenue-Variable
costs=contribution margin-fixed costs= net income
FOB shipping point - CORRECT ANSWER-the title passes from the seller to the buyer
at the shipping point.
FOB destination - CORRECT ANSWER-the title passes from the seller to the buyer at
the destination
product cost definition - CORRECT ANSWER-how much it costs to get your products
into the store
"n/30" - CORRECT ANSWER-30 days no interest
"2/10, n/30" - CORRECT ANSWER-2% discount if pays in 10 days
internal controls - CORRECT ANSWER-protect the companies assets (merchandise)
FIFO - CORRECT ANSWER-first in, first out - higher ending inventory value. Use in
periods on declining prices
LIFO - CORRECT ANSWER-last in, first out - lowest ending inventory value. More
clearly matches current inventory costs with sales revenue. Use in periods of rising
prices
Product cost - CORRECT ANSWER-becomes an asset than expense when sold
period cost - CORRECT ANSWER-always be an expense "right now". administrative
costs are always a period cost
variable cost - CORRECT ANSWER-cost that changes in total as activity changes
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