Business Administration 2257 Lecture Notes - Lecture 5: Current Asset, Foreign Object Damage, Income Statement
10 Apr 2016
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Document Summary
Merchandising involves purchasing products to resell to customers. Merchandise items have two characterisics: they are owned by the company, they are in a form ready for sale to the customers. Retailers merchandising companies that purchase and resell directly to customers. Wholesalers merchandising companies that sell to retailers. Manufacturers company that produces goods for sale to wholesalers. A manufacturing companies inventory difers from that of a wholesaler or retailer. The operaing cycle is the ime that it takes to go from cash to cash in producing revenues. It is usually longer for merchandising companies than it is for service companies. Operaing cycle for merchandising company: purchase inventory from suppliers on account pay cash to suppliers sell inventory to customers on account receive cash from customers . Income is measured the same as it would be for a service company. Expenses are divided into two categories: (1) cost of goods sold and (2) operaing expenses.
