RSM219H1 Lecture Notes - Accounting Information System, Income Statement, Main Source

• School: UTSG
• Department: Rotman Commerce
• Course: RSM219H1
• Professor: Alexander Edwards

Document Summary

Merchandising involves purchasing products which is inventory to resell to customers. Inventory for a merchandising company can consist of many different items. There is only one inventory classification which is called merchandising inventory or just inventory. Merchandising companies that purchase and sell directly to customers are called retailers. Merchandising companies that sell to retailers are known as wholesalers. Companies that produce goods for sale to wholesalers were others are called manufacturers. Inventory has two common characteristics one is they are owned by the company and second is they are in a form ready for sale to customers. Inventory is usually classified into three categories by manufacturing companies, raw materials, work in process, and finished goods. Raw materials are the basic goods and materials that are on hand and will be used in production but have not yet been sent into production. Work in process is that portion of inventory on which production has started but it is not yet complete.