CHAPTER-10_ACCOUNTING-CYCLE-OF-A-MERCHANDISING-BUSINESS.pptx - Chapter 10 Accounting Cycle of a Merchandising Business(FAR by Millan Chapter 10

CHAPTER-10_ACCOUNTING-CYCLE-OF-A-MERCHANDISING-BUSINESS.pptx...

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Chapter 10: Accounting Cycle of a Merchandising Business (FAR by: Millan)
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Chapter 10 Accounting Cycle of a Merchandising Business Learning Objectives 1. Prepare the Statement of Cost of Goods Sold and Gross Profit. 2. Complete the accounting cycle of a merchandising business Chapter 10: Accounting Cycle of a Merchandising Business (FAR by: Millan)
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Merchandising Business A merchandising business is one that buys and sells goods , in their original form and without any further processing. Those goods are referred to as merchandise inventory (or simply, inventory). Chapter 10: Accounting Cycle of a Merchandising Business (FAR by: Millan)
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Inventory Systems a. Perpetual inventory system – under this system, the “Inventory” account is updated each time a purchase or sale is made. Thus, the “Inventory” account shows a continuing or running balance of the goods on hand. b. Periodic inventory system – under this system, the “Inventory” account is updated only when a physical count is performed. Thus, the amounts of
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