Kế toán, kiểm toán - Chapter 5: Accounting for merchandise operations

Chapter 5ACCOUNTING FOR MERCHANDISE OPERATIONSINVENTORY SYSTEMSC 2Perpetual systemscontinually update accounting records for merchandising transactionsPeriodic systemsaccounting records relating to merchandise transactions are updated only at the end of the accounting periodC 2INVENTORY SYSTEMSP1ACCOUNTING FOR MERCHANDISE PURCHASESPURCHASE DISCOUNTS A deduction from the invoice price granted to induce early payment of the amount due.P12/10,n/30Discount PercentNumber of Days Discount Is AvailableOtherwise, Net (or All) Is Due in 30 DaysCreditPeriodPURCHASE DISCOUNTSP1PURCHASE RETURNS AND ALLOWANCESPurchase Return . . . Merchandise returned by the purchaser to the supplier.Purchase Allowance . . . A reduction in the cost of defective merchandise received by a purchaser from a supplier.P1TRANSPORTATION COSTS AND OWNERSHIP TRANSFERP1ACCOUNTING FOR MERCHANDISEP1ACCOUNTING FOR MERCHANDISE SALESP2SALES OF MERCHANDISE P2Each sales transaction for a seller of merchandise involves two parts:Revenue received in the form of an asset from a customerRecognition of the cost of merchandise sold to a customerSALES RETURNS AND ALLOWANCESP2Sales returns and allowances usually involve dissatisfied customers and the possibility of lost future sales.Sales returns refer to merchandise that customers return to the seller after a sale. Sales allowances refer to reductions in the selling price of merchandise sold to customers. MERCHANDISING COST FLOW IN THE ACCOUNTING CYCLEBeginning inventoryNet purchasesMerchandise available for saleEnding inventoryCost of goods soldTo Income StatementTo Balance SheetTo Income StatementTo Balance SheetPeriod 1Beginning inventoryNet purchasesMerchandise available for saleEnding inventoryCost of goods soldPeriod 2P2CLOSING ENTRIES FOR MERCHANDISERSP3P4A multiple-step income statement format shows detailed computations of net sales and othercosts and expenses, and reports subtotals for various classes of items.SINGLE-STEP INCOME STATEMENTP4CLASSIFIED BALANCE SHEETHighlyLiquidLessLiquidP4END OF CHAPTER 5