1 / 8

Chapter 5

Chapter 5. Accounting for Merchandising Operations. Conceptual Learning Objectives. C1: Describe merchandising activities and identify income components for a merchandising company C2: Identify and explain the inventory asset of a merchandising company

wesley
Download Presentation

Chapter 5

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 5 Accounting for Merchandising Operations

  2. Conceptual Learning Objectives C1: Describe merchandising activities and identify income components for a merchandising company C2: Identify and explain the inventory asset of a merchandising company C3: Describe both perpetual and periodic inventory systems C4: Analyze and interpret cost flows and operating activities of a merchandising company

  3. AnalyticalLearning Objectives A1: Compute the acid-test ratio and explain its use to assess liquidity A2: Compute the gross margin ratio and explain its use to assess profitability

  4. Procedural Learning Objectives P1: Analyze and record transactions for merchandise purchases using a perpetual system P2: Analyze and record transactions for merchandise sales using a perpetual system P3: Prepare adjustments and close accounts for a merchandising company P4: Define and prepare multiple-step and single-step income statements P5: Appendix 5A: Record and compare merchandising transactions using both periodic and perpetual inventory systems

  5. Service organizations sell time to earn revenue. Examples: Accounting firms, law firms and plumbing services Expenses Equals Netincome Minus Merchandising Activities C 1 Revenues

  6. Merchandising Activities C 1 Merchandising Companies Manufacturer Wholesaler Retailer Customer

  7. Merchandising companies sell products to earn revenue. Examples: sporting goods, clothing, and auto parts stores Minus Equals Minus Equals NetSales Reporting Income of a Merchandiser P2 Cost ofGoods Sold GrossProfit Expenses NetIncome

  8. Begins with the purchase of merchandise and ends with the collection of cash from the sale of merchandise. Operating Cycle for a Merchandiser C 2 Credit Sale Cash Sale Cashcollection Purchases Purchases Merchandiseinventory Accountreceivable Cashsales Merchandiseinventory Credit sales

More Related