【会计学英文教案】AccountingforMerchandisingActivities.doc

Lesson Notes Lesson 6 Accounting for Merchandising Activities Learning Objectives Describe merchandising activities and identify business types. Identify and explain the important components of income for a merchandising company. Record and compare merchandising transactions using both periodic and perpetual inventory systems. Analyze and record transactions for merchandising purchases using a perpetual system. Analyze and record transactions for sales of merchandise using a perpetual system. Prepare adjustments entries for a merchandising company. Prepare closing entries for a merchandising company. Teaching Hours Students major in accounting: 6 hours Other students: 3 hours Teaching Contents Scandals in stock market occur now and then. Among them, financial frauds or income manipulation are common. Income manipulation typically starts from making up sales revenues as well as purchases, for example, GuangXia (Yinchuan). In this lesson you are required to think about, Why these income statement numbers are so important? How they are recorded in accounting system? Merchandising company The main activity for a merchandising company is to purchase merchandise inventory and then sell them to generate profit. Wholesalers and retailers are examples of merchandising companies. Service revenue vs. merchandising revenue Both service and merchandising businesses generate sales. Service organizations sell time to earn revenue. Merchandising companies sell merchandise to earn revenue. Operating Cycle of Merchandise Companies In order for it to generate sales, the merchandiser must first purchase merchandise inventory that it then sells. The operating cycle of merchandise companies involves the purchase and subsequent sale of merchandise inventory. Revenue from selling merchandise is called sales revenue, and the expense of buying and preparing merchandise inventory for resale is cost of goods sold (COGS). Merchandise inventory represents the goods held for resale in the nor