tailieunhanh - Lecture Principles of accounting (2005): Chapter 5 - Needles, Powers, Crosson

Chapter 5 - Merchandising operations. This chapter introduces the merchandising business and the merchandising income statement. The perpetual inventory system is presented first with the periodic inventory presealed as an alternative. The merchandising work sheet is included as a supplemental objective. | Merchandising Operations Multimedia Slides by: Gail A. Mestas, MAcc, New Mexico State University Chapter 5 Learning Objectives Identify the management issues related to merchandising businesses. Compare the income statements for service and merchandising concerns, and define the components of the merchandising income statement. Define and distinguish the terms of sale for merchandising transactions. Prepare an income statement and record merchandising transactions under the perpetual inventory system. Supplemental Objectives Prepare an income statement and record merchandising transactions under the periodic inventory system. Prepare a work sheet and closing entries for a merchandising concern using the perpetual inventory system. Prepare a work sheet and closing entries for a merchandising concern using the periodic inventory system. Apply sales and purchases discounts to merchandising transactions. Management Issues in Merchandising Businesses Objective 1 Identify the management . | Merchandising Operations Multimedia Slides by: Gail A. Mestas, MAcc, New Mexico State University Chapter 5 Learning Objectives Identify the management issues related to merchandising businesses. Compare the income statements for service and merchandising concerns, and define the components of the merchandising income statement. Define and distinguish the terms of sale for merchandising transactions. Prepare an income statement and record merchandising transactions under the perpetual inventory system. Supplemental Objectives Prepare an income statement and record merchandising transactions under the periodic inventory system. Prepare a work sheet and closing entries for a merchandising concern using the perpetual inventory system. Prepare a work sheet and closing entries for a merchandising concern using the periodic inventory system. Apply sales and purchases discounts to merchandising transactions. Management Issues in Merchandising Businesses Objective 1 Identify the management issues related to merchandising businesses Merchandising Businesses earn income by buying and selling products or merchandise Can be wholesalers or retailers Use the same basic accounting methods as service companies The process is more complex than for service companies because of the buying and selling of merchandise The goods on hand for sale to customers are called merchandise inventory Management Issues in Merchandising Businesses Cash flow management Profitability management Choice of inventory system Control of merchandising operations Cash Flow Management involves managing a company’s receipts and payments of cash If bills cannot be paid when due, the company may be forced out of business Merchandising businesses engage in a series of transactions called the operating cycle The Operating Cycle Transactions in the operating cycle include Purchase of merchandise inventory for cash or credit Payment for purchases made on credit Sales of merchandise inventory for cash or on credit