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Financial Reporting for a Departmentalized Business

Terms that you need to know. Fiscal PeriodThe length of time which a business summarizes and reports financial information.Departmental Statement of gross profitProvides a statement of revenue an cost information for each department.Interim departmental statement of gross profit.A statement tha

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Financial Reporting for a Departmentalized Business

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    1. Chapter 4 Financial Reporting for a Departmentalized Business

    2. Terms that you need to know Fiscal Period The length of time which a business summarizes and reports financial information. Departmental Statement of gross profit Provides a statement of revenue an cost information for each department. Interim departmental statement of gross profit. A statement that show revenue and cost information for a shorter term than a fiscal period.

    3. Why do we use Departmental statements of gross profit We use it to determine ending merchandise inventory. Two types of computing inventory Periodic Physical inventory Perpetual Book inventory We use the gross profit method of estimating an inventory with this type of

    4. Estimating Ending Merchandise inventory Calculating Net Purchases and Net Sales Purchases – Purchase Return and Allowances – Purchases Discount = Net Purch. Sales – Sales Return and Allowance – Sales Discount = Net Sales

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