Accounting Terminology Listed Below Are Nine Technical Accounting Terms Introduced in This

question 80

Essay

Accounting terminology
Listed below are nine technical accounting terms introduced in this chapter:
Gross profit
Gross profit rate
General ledger
Cost of goods sold
Physical inventory
Subsidiary ledger
Perpetual inventory system
Periodic inventory system
Inventory shrinkage
Each of the following statements may (or may not) describe one of these technical terms. In the space provided below each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms.
a. An approach to accounting for inventories and the cost of goods sold used primarily in small businesses with manual accounting systems.
b. A reason why perpetual inventory records may not be entirely accurate.
c. The difference between the revenue earned by selling goods and the cost of goods sold.
d. Gross profit divided by average total shareholders' equity.
e. An accounting procedure used in both perpetual and periodic inventory systems. In a perpetual system, this procedure brings to light the amount of inventory shrinkage. In a periodic system, it is the basis for computing the cost of goods sold.
f. An accounting record showing the individual items comprising the balance of a general ledger account.
g. The accounting record in which transactions initially are recorded.

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