MERCHANDISER One who buys tables and chairs for resale 

PERIODIC METHOD A method of accounting wherein the cost of the merchandise sold is
determined only after making a physical inventory count 
PERPETUAL METHOD Method which keeps a detailed recording of inventory for each item
stocked  

SALES  Account title used for revenue earned where goods are delivered to
customers 
PURCHASES Account title used for goods bought for resale by the company 

FURNITURES AND FIXTURES Account title used when buying table and chairs use for company 

GROSS PROFIT Excess of net sales over cost of sales  

MERCHANDISE INVENTORY, Stocks of goods

BEGINNING unsold the previous accounting period 

FREIGHT COLLECT A freight payment agreement when freight is payable only upon arrival
of the goods bought 

FREIGHT IN Represents transportation cost which is added to the cost of goods

bought for resale 

FOB DESTINATION Ownership of goods transferred only upon delivery to buyer’s place of
business 

FREIGHT OUT An account used to record transportation cost incurred by the seller 

TRADE DISCOUNT Discount granted to the customer on date of purchase based on the
catalogue price 

CASH DISCOUNT A discount granted to a customer for paying account promptly 

PURCHASE RETURNS AND A reduction in the cost of the goods purchased for resale when the
ALLOWANCES goods are returned to the supplier for being defective or spoiled 

GOODS AVAILABLE FOR SALE The sum of net purchases and beginning merchandise inventory 

FUNCTION OF EXPENSE Income statement form showing costs and expenses according to its
METHOD function 

ADMINISTRATIVE EXPENSE Expenses needed in the general administration of the business 

MULTI-STEP FORM Income statement form showing intermediate margin of figures starting
from the major activities and ending with minor activities