MGT 11A Chapter Notes - Chapter 4: Balance Sheet, Current Asset, Accounts Receivable
Document Summary
Merchandise = products/goods acquired by a company to resell to customers. 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) Merchandise inventory (current asset, products owned and intending to sell) Retailer = intermediary buying product from manufacturer/wholesaler and sells to consumers. Gross profit = gross margin = net sales - cost of goods sold. 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. Continually updates accounting records for merchandising transactions (for records of inventory available for sale & inventory sold) Updates accounting records for merchandise transactions only at the end of a period. Is more greatly used b/c it gives immediate access to detailed info on Cost of merchandise for resale is recorded in merchandise inventory asset account.
