note 005 Financial Accounting of Sole Trader Financial account 财务会计 教学课件.ppt

Merchandising Activities Merchandising Activities Reporting Income for a Merchandiser Operating Cycle for a Merchandiser Inventory Systems Trade Discounts Purchase Discounts Purchase Discounts Purchase Returns and Allowances Transportation Costs Itemized Cost of Merchandise Purchased Accounting for Merchandise Sales Value of Ending Inventories Perpetual system - the inventory account is updated for any changes in the stock balance. The inventory amount at any point of time could be determined directly from the books of the enterprise. Periodic system - the inventory account is only updated periodically after a stock count has been undertaken. The inventory amount at any point in time cannot be determined from the books of the enterprise. Income Statement Formats Income Statement Single-Step Income Statement Balance Sheet Liana Mohamad FA1 Financial Accounting of Sole Trader Topic 5 Service organizations sell time to earn revenue. Examples: accounting firms, law firms, and plumbing services Revenues Expenses Minus Netincome Equals Manufacturer Wholesaler Retailer Customer Merchandising Companies Merchandising companies sell products to earn revenue. Examples: sporting goods, clothing, and auto parts stores Cost ofGoods Sold GrossProfit Expenses NetIncome NetSales Minus Equals Minus Equals Begins with the purchase of merchandise and ends with the collection of cash from the sale of merchandise. Purchases Merchandiseinventory Credit sales Accountreceivable Cashcollection Purchases Merchandiseinventory Cashsales Cash Sale Credit Sale + + Beginninginventory Net cost ofpurchases Inventory available for sale Ending Inventory Cost of GoodsSold = Used by manufacturers and wholesalers to offer better prices for greater quantities purchased. Example Matrix, Inc. offers a 30% trade discount on orders of 1,000 units or more of their popular product Racer. Each Racer has a list price of $5.25. 2/10,n/30 Discount Percent Number of Days Discount Is Availab