33:010:272 Chapter Notes - Chapter 5: Income Statement, Trial Balance, Perpetual Inventory
9 Apr 2014
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Merchandizing firms buy and sell goods and make a profit on the difference between the buying and selling price. Such firms can be wholesalers (sell only to other merchandizing firms) or retailers (sell to customers). The operating revenues for a merchandizing firm come from its core operations of buying and selling merchandize. A secondary source of revenue is from interest from a credit card operation. The expenses are split into three (1) cogs (2) operating expenses and (3) other expenses (see illustration 5-11, p 212. ) Before discussing the details of accounting for merchandizing operations, we begin with some basics about accrual accounting. Revenue and expenses are ____ the same as cash in and cash out. Assets = liabilities + stockholders equity may be rewritten as. Cash + non cash assets = liabilities + contributed capital + retained earnings or as. Cash - retained earnings = liabilities + contributed capital - non cash assets.
