Notes Chapter 5

Notes Chapter 5 - Notes Chapter 5 I. Merchandising...

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Notes Chapter 5 I. Merchandising Operations a. Merchandising companies- buy and sell merchandise rather than perform services as their primary source of revenue (ex. Wal-Mart, Kmart, Target) a.i. Retailers- purchase and sell to directly to consumer a.ii. Wholesalers- sell to retailers a.iii. Sales Revenue- the primary source of revenues for merchandising companies a.iv. Cost of goods sold- total cost of merchandise sold during the period b. Inventory Systems- keep track of inventory to determine what is available for sale and what has been sold b.i. Perpetual inventory system—companies maintain detailed records of the cost of each inventory purchase and sale b.ii. Periodic inventory system—determine the cost of goods sold only at the end of the accounting period II. Income Statement Presentation a. Single-Step Income Statement: total expenses – total revenues = net income (or loss) b. Multiple-Step Income Statement: gross profit, income from operations, net income b.i. Net sales – cost of goods sold = GROSS PROFIT
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Notes Chapter 5 - Notes Chapter 5 I. Merchandising...

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