For a Merchandising Company All Accounts That Affect the Determination

question 240

True/False

For a merchandising company all accounts that affect the determination of income are closed to the Income Summary account.

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Definitions:

Perpetual Inventory

A system for managing inventory that instantly logs inventory sales or purchases via computerized point-of-sale systems and software for enterprise asset management.

Freight

The charge paid for transport of goods, typically either by land, sea, or air.

FOB Destination

A shipping term indicating that the sale is considered complete and the goods owned by the buyer upon arrival at the buyer's location.

Credit Memo

A document issued by a seller to a buyer, reducing the amount owed, typically due to a return or refund.