Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 7

Following are a number of the key terms and concepts introduced in the chapter, along with a list of corresponding definitions. Match the appropriate letter for the key term or concept to each definition provided (items 1–10). Note that not all key terms and concepts will be used.

a. Revenues	k. Freight collect
b. Realization	l. Gross profit (or gross margin)
c. Earned	m. Gross profit ratio (or gross margin ratio)
d. Sales	n. Sales mix
e. Sales returns and allowances	o. Operating expenses
f. Net sales	p. Income from operations
g. Shipping terms	q. Gains
h. FOB destination	r. Income before income taxes
i. FOB shipping point	s. Net income
j. Freight prepaid	t. Income before extraordinary items

_____Reductions in sales from product returns or adjustments in selling price.