ACU 6 - UNIT 6 MERCHANDISING A merchandising company is a...

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UNIT 6 MERCHANDISING A merchandising company is a Retailer. Retailers buy merchandise from manufacturers and/or wholesalers, mark the merchandise up enough to cover operating expenses and make a profit. Merchandise bought for re-sale is charged to Purchases. Cost of merchandise sold is calculated by subtracting Ending Inventory from Beginning Inventory plus Net Purchases (including transportation costs). Sales Discounts and Purchase Discounts are given to those who pay early. An example of discount terms would be 2/10,n30 which means 2% is taken off if paid within 10days, otherwise pay within 30 days. Unsatisfactory goods are accounted for by charging Sales Returns and Allowance or Purchase Returns and Allowance. I. LOGIC OF MERCHANDISINGDEBITS AND CREDITS Debits I Purchases < > Credits Sales I Note: Sales and Purchases are opposites and therefore have opposite nonnal balances. Their return and discount accounts also have opposite balances. Sales Returns Sales Discounts < > Purchase Returns Purchase Discounts DARIN'S MUSIC EMPORIUM Darin Jones graduated in December of 1994, and after a brief vacation, took the accumulation from his Laundry business and invested $10,000 in Darin's Music Emporium, a retailer of computerized musical instruments. Sample Journal Entries and 1995 statements along with Closing Entries appear below. Please read transaction descriptions first.
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This note was uploaded on 10/27/2009 for the course MBA 1918272 taught by Professor Peter during the Fall '09 term at Aberystwyth University.

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ACU 6 - UNIT 6 MERCHANDISING A merchandising company is a...

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