If merchandise sold on account is returned to the seller, the seller acknowledges the return by issuing a

Even if borrowing is needed to pay within the discount period, it is generally advantageous for the buyer to take advantage of purchases discounts.

In a periodic inventory system, the cost of merchandise purchased includes the cost of freight in.

The fees associated with credit card sales are periodically recorded as expenses.

Purchased goods in transit, shipped FOB destination, should be excluded from ending inventory of the buyer.

What type of company would normally offer trade discounts to its customers?

Most companies will not take a purchases discount, because 1% or 2% discounts are insignificant.

The single-step income statement is easier to prepare, but a criticism of this format is that gross profit and operating income are not readily available.

Merchandise is sold for $3,600, terms FOB destination, 2/10, n/30, with prepaid freight costs of $150. The sales amount recorded under the net method is $3,528.

Cost of goods sold is the amount that a merchandising business pays for the merchandise it intends to sell.