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Chapter 4

MGT 11A Chapter Notes - Chapter 4: Balance Sheet, Current Asset, Accounts Receivable


Department
Management
Course Code
MGT 11A
Professor
J.Hancock
Chapter
4

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Ch. 4 Reporting and Analyzing Merchandising Operations
Merchandising Activities
- Merchandise = products/goods acquired by a company to resell to customers
- Merchandiser = are either wholesalers/retailers.
- Is an intermediary buying products from manufacturers/other wholesalers and
then sells to retailers/other wholesalers.
- Net Income = revenues - (cost of merchandise sold + cost of other expenses)
- Balance sheet includes..
- Merchandise inventory (current asset, products owned and intending to
sell)
- Operating Cycle
- Cash purchases of merchandise
- Inventory for sale
- Credit sales to…
- Accounts receivable to..
- Cash
- *cash Sales shorten operating cycles
- Retailer = intermediary buying product from manufacturer/wholesaler and sells to
consumers
- Can sell both products and services
- Gross Profit = Gross Margin = Net Sales - Cost of goods sold
- Inventory Systems
- Inventory = products owned and expecting to sell in normal operations.
- Beginning inventory + Net Purchases = Merchandise for Sale
- Merchandise for Sale = Ending Inventory + Cost of Goods sold
- 2 inventory accounting systems
- Perpetual System
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