Accounting 2000 9-30

Accounting 2000 9-30 - -ownership passes when goods reach...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Accounting 2000 9/30/11 Inventory- considered merchandising company Merchandising Company -buy and sell goods -income measurement (accounts) Sales revenue Cost of goods sold (expense) Gross profit Operating expenses Net income Operating cycles - cycle of merchandising company ordinarily is longer than that of a service company Perpetual system - detailed record of the cost of each inventory purchase and sale -constantly update the cost of your inventory Periodic system - don’t keep detailed records of goods on hand -cost of goods sold determined by count at the end of the accounting period -physical count at the end of the period -no way to account shoplifting (shrinkage) “FOB”- Free on board FOB shipping point -buyer pays freight
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: -ownership passes when goods reach shipping board FOB Destination-seller pays freight Under perpetual inventory system, when a buyer pays the freight, that is a cost of inventory *therefore, increase merchandising inventory Freight costs incurred by the seller are an operating expense CLICKER: the Shoe Box paid freight of $300 on the purchase of merchandise. What account would be debited by Shoe Box? 1. Freight-in 2. Freight expense 3. Freight-out 4. Inventory Purchase returns and allowances Purchase return- credit or cash Purchase allowance- keep merchandise and reduce what you owe Purchase discounts 1. Purchaser saves money 2. Shortens seller operating cycle *THE SLIDES FROM CLASS ARE ON MOODLE...
View Full Document

This note was uploaded on 01/19/2012 for the course ACCT 2000 taught by Professor Holmes during the Fall '08 term at LSU.

Page1 / 2

Accounting 2000 9-30 - -ownership passes when goods reach...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online