ACCT 2000 Study Guide - Interest Expense, Gross Profit, Cash Cash
Document Summary
Merchandising companies: buy and sell goods, primary source of revenue is sales revenue or sales. Cogs is the total cost of merchandise during the period sold. The operating cycle of a merchandising company ordinarily is. Companies use either a perpetual inventory system or a periodic inventory system account for inventory. Periodic: do not keep detailed records of the goods on hand. Chapter 5 notes: cost of goods sold determined by count at the end of the accounting period, calculation of cost of goods sold example: We will learn how to record inventory related transactions using the perpetual system. Purchase invoice should support each credit purchase. A purchaser may be dissatisfied because goods are damaged or defective, of inferior quality, or do not meet specifications. Purchase allowance return goods keep goods with a price reduction. Credit terms may permit buyer to claim a cash discount for prompt payment. Now, let"s see the flip side---- the seller!
