4MerchandisingActivitiesandAccountingInformationSystems课件.pptVIP

1. Nature of Merchandising Business 2 a. Accounting for Purchases 2 b. Accounting for Sales 2 c. Transportation Costs 2 d. Merchandise Transactions 3. Merchandising Chart of Accounts 4. Merchandising Income Statement 5. Merchandising Accounting Cycle 6. Acid-test Ratio, Gross margin Ratio Learning Abstract 4-1 Service enterprise Vs merchandising concern 4-2 Two inventory systems 4-3 Purchase, Sales Revenue and Cost of Goods Sold 4-4 Alternative Income Statement Formats 4-5 Worksheet and Closing Entries 4-6 Practices in China 4-7 Acid-test Ratio, Gross margin Ratio 4-1 Service enterprise Vs Merchandising Concern Service enterprises provide services or intangible products to their customers. Merchandising-sector companies purchase and then sell tangible products without changing their basic form. Gross Profit Cost of Goods Sold Tracking Inventory Costs:Goods available for sale Most companies start an accounting period with some inventory on hand, this is known as “beginning inventory.” Additional items are usually acquired during the period, known as “purchases.” Add these two amounts together to determine the “goods available for sale.” Cost of Goods Sold The goods available for sale represents the amount that “could have been” sold. The goods that are NOT sold are called “ending inventory.” Subtracting the ending inventory from the goods available for sale determines the amount of “cost of goods sold”. COGS Schedule Inventory Systems The key to calculating cost of goods sold is accounting for the ending inventory. Cost valuation - process of assigning specific historical costs to items counted in the physical inventory Two main systems for keeping merchandise inventory records: Perpetual inventory system - a system that keeps a running, continuous record that tracks inventories and the cost of goods sold on a day-to-day basis Periodic inventory system - a system in which the cost of good sold is computed periodically by relying solely on