COGS

Gross Profit = Sales - Purchases

• true

• false

Inventory is the most important asset of a merchandising firm.

• true

• false

The account covering the transportation costs in getting the merchandise purchased to the place of designated delivery is termed as freight-in in the books of the buyer.

• true

• false

Customers who buy in big volume are given a reduction in price called "Trade- in Discount."

• true

• false

A ______________ is the offer of a cash discount to a customer to encourage them to pay the balance at an earlier date.

• Purchase Returns and Allowances

• Purchase Discounts

• Sales Returns and Allowances

• Sales Discounts

________________ result when customers are dissatisfied with merchandise and are allowed to return the goods to the seller for credit or a

refund.

• Purchase Discount

• Purchase Returns and Allowances

• Sales Discount

• Sales Returns

Activities involved in selling products or services in return for money or other compensation.

• Merchandise Inventory

• Sales

• Revenue

• Accounts Payable

This comprises the company's "biggest" expense and is deducted from net sales to arrive at the gross profit.

• Operating Expense

• Goods Available for Sale

• Freight-Out

• Cost of Good Sold

Based on the information that follows, compute for the Cost of Good Sold (COGS).
Merchandise Inventory, January 1, 2023 Php 136,000
Purchases 408,000
Purchases Returns and Allowances 16,800
Purchases Discounts 8,160
Freight-in 3,200
Merchandise Inventory, December 31, 2022 112,000

• Php 383,040

• Php 410,240

• Php 362,240

• Php 355,840