1.

What type of inventory system is when separate accounts are used to record freight costs,

returns, and discounts?

Answer: Periodic Inventory System

2. Goods that are completed and ready for sale

Answer: Finished Goods

3. Is in various stages of production but not yet completed

Answer: Work in process

4. Are on hand waiting to be used in production

Answer: Raw Materials

5. Identifies the particular units sold so that the cost of the specific unit sold is charged to the

cost of goods sold.

Answer: Specific identification method

6. Detailed records of the cost of each inventory item are maintained and the cost of each item

sold is determined from the records when the sale occurs

Answer: Perpetual System

7. Detailed inventory records are not maintained and the cost of goods sold determined only at

the end of an accounting period

Answer: Periodic System

8. The buyer must pay the freight cost

Answer: FOB Shipping Point

9. The seller pays the freight

Answer: FOB Destination

10. Offer of a cash discount to a customer for the prompt payment of a balance due

Answer: Sales Discount

11. Net sales less cost of goods sold

Answer: Gross Profit