ch05b - Merchandising Operations and the Multiple-Step...

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Chapter 5-1 Merchandising Operations and the Multiple-Step Income Statement Day 2 Foster. Spring 2010
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Chapter 5-2 1. Identify the differences between a service company and a merchandising company. 2. Explain the recording of purchases under a perpetual inventory system. 3. Explain the recording of sales revenues under a perpetual inventory system. 4. Distinguish between a single-step and a multiple-step income statement. 5. Determine cost of goods sold under a periodic system. 6. Explain the factors affecting profitability. Study Objectives
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Chapter 5-3 Made for cash or credit (on account). Normally recorded when earned, usually when goods transfer from seller to buyer. Sales invoice should support each credit sale. Recording Sales of Merchandise Illustration 5-5
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Chapter 5-4 Two Journal Entries to Record a Sale Cash or Accounts receivable XXX Sales XXX Recording Sales of Merchandise #1 Cost of goods sold XXX Merchandise inventory XXX #2 Sellin g Price Cost
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5-5 Recording Sales of Merchandise Accounts receivable 3,800 May 4 Sales 3,800 Illustration: Assume PW Audio Supply records its May 4 sale of $3,800 to Sauk Stereo on account (Illustration 5-5) as follows. Assume the merchandise cost PW Audio Supply $2,400.
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ch05b - Merchandising Operations and the Multiple-Step...

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