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Chapter 5 Notes - -shipping point buyer-destination...

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Chapter 5 Notes: Accounting for Merchandising Operations -Contra revenue: sales returns and allowances, discounts -revenue: sales -Periodic cost recorded only at end of period -The operating cycle of a merchandising company usually is longer than a service company -same accounting cycle -Purchaser -merchandise inventory=account company uses for goods they’re selling -need documents for evidence
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Unformatted text preview: -shipping point: buyer-destination: seller-Return AP MI-discount: credit MI for that amount-sales recorded when earned, usually when goods transfer from seller to buyer -Cash/AR Sales (selling price)-COGS MI (cost)-Periodic: COGS=BEG+Pur-END Gross Profit: Net sales-COGS Gross Profit/Net sales=GP Rate Income from operations=income from operating activities-operating expenses...
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