Ch05 - 5 Accounting for Merchandising Operations Chapter...

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198 Chapter 5 Accounting for Merchandising Operations Scan Study Objectives a Read Feature Story a Read Preview a Read text and answer p. 207 a p. 210 a p. 213 a p. 218 Work Comprehensive p. 219 a Review Summary of Study Objectives a Answer Self-Study Questions a Complete Assignments a DO IT! The Navigator STUDY OBJECTIVES A Feature Story After studying this chapter, you should be able to: 1 Identify the differences between service and merchandising companies. 2 Explain the recording of purchases under a perpetual inventory system. 3 Explain the recording of sales revenues under a perpetual inventory system. 4 Explain the steps in the accounting cycle for a merchandising company. 5 Distinguish between a multiple-step and a single-step income statement. 6 Explain the computation and importance of gross profit. The Navigator A DO IT! WHO DOESN’T SHOP AT WAL-MART? In his book The End of Work, Jeremy Rifkin notes that until the 20th century the word consumption evoked negative images. To be labeled a “consumer” was an insult. In fact, one of the deadliest diseases in history, tuberculosis, was often referred to as “consumption.” Twentieth-century merchants real- ized, however, that in order to prosper, they had to convince people of the need for things not previously needed. For example, General Motors made annual changes in its cars so that people would be discontented with the cars they already owned. Thus began consumerism. PDF Watermark Remover DEMO : Purchase from www.PDFWatermarkRemover.com to remove the watermark
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199 Today consumption describes the U.S. lifestyle in a nutshell. We consume twice as much today per person as we did at the end of World War II. The amount of U.S. retail space per person is vastly greater than that of any other country. It appears that we live to shop. The first great retail giant was Sears, Roebuck and Company . It started as a catalog company enabling people in rural areas to buy things by mail. For decades it was the uncontested merchandising leader. Today Wal-Mart ( www.walmart.com ) is the undisputed champion provider of basic (and perhaps not-so-basic) human needs. Wal-Mart opened its first store in 1962, and it now has more than 6,000 stores, serving more than 100 million customers every week. A key cause of Wal-Mart’s incredible growth is its amazing system of inventory control and distribution. Wal-Mart has a management information system that employs six satellite channels, from which company computers receive 8.4 million updates every minute on what items customers buy and the relationship among items sold to each person. Measured by sales revenues, Wal-Mart is the largest company in the world. In six years it went from selling almost no groceries to being America’s largest grocery retailer.
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This note was uploaded on 01/30/2011 for the course ACT 240 taught by Professor Janson during the Summer '08 term at N. Michigan.

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Ch05 - 5 Accounting for Merchandising Operations Chapter...

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