Assignment #1- The Role of Accounting on Business and Our Society ACC 100 March 2, 2014 Financial Statements There are three financial statements that are used in the accounting process; Income statement, Statement of Owners Equity and Balance Sheet. The purpose of the income statement is to report a firm’s earnings over a period of time which is usually their previous fiscal year. Statement of owners’ equity reports the changes of the company’s transactions for a particular time period, all
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the company purchases inventory from a vendor and the company sells the inventory to the customer. Finally the company collects cash from customers. Objectives of merchandising operations Account for the sale of inventory Use sales and gross profit to evaluate a company Adjust and close the accounts of a merchandising business Prepare a merchandiser’s financial statements Use gross profit percentage and inventory turnover to evaluate a business Accounting inventory Merchandising companies
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Literature review Budgeting Establishing a planned level of expenditures, usually at a fairly detailed level. A company may plan and maintain a budget on either an accrual or a cash basis. Business budgeting is one of the most powerful financial tools available to any small-business owner. Put simply, maintaining a good short- and long-range financial plan enables you to control your cash flow instead of having it control you. The most effective financial budget includes both a short-range
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Analysis (16-20%) | |Area III |Financial Management (17-23%) |Financial Management (19-23%) | |Area IV |Information Technology (22-28%) |Information Systems and Communication (15-19%) | |Area V |Planning and Measurement (22-28%) |Strategic Planning (10-14%) | |Area VI |N/A |Operations
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& Kieso, 2011). To calculate the cost of goods sold, it would depend on which type of system the merchandising company is using. If they are using a perpetual system, which means that the organization uses daily detailed entries for the cost of their inventory’s purchase and sale, they would be journalizing each selling price of merchandise (Kimmel, Weygandt, & Kieso, 2011). For example, for inventory sold, an accountant would debit Accounts Receivable or Cash and Sales Revenue is credited
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Entities, Financial Statements Accounting for Transactions –Part 1 Accounting for Transactions –Part 2 Accounting for Adjustments- Part 1 Accounting for Adjustments- Part 2 Completion of Accounting Cycle Accounting Systems Revision Chapters 1 - 4 Accounting for Retailers Accounting for Inventories Non-Current Assets Cash Management and Control Accounting for Receivables Tutorial Exercises Lecture Notes Week 1 Introduction to Accounting, Ethics, Business Entities, Financial Statements Required
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sale are called inventory, or more specifically, merchandise inventory. Inventory is a current asset that will be sold to yield a profit--and the adage "buy low, sell high" is a succinct way to state a merchandiser's profit strategy. In addition to introducing a new asset, we also introduces a new cost category, and a new name for the revenue account. The cost is called Cost of Merchandise Sold (also called Cost of Goods Sold by some companies), and represents the cost of the inventory that was sold
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purchases under a |5, 6, 7, 8, 9, 10,|2, 3, 4, 5 |1, 2, 4, 5, 10 |2, 3, 4 |2, 3, 4 | |perpetual inventory system. |11 | | | | | |Prepare entries for sales under a |8, 9, 10, 11 |6, 7 |1, 3, 4, 5, 10 |2, 3, 4 |2, 3, 4 | |perpetual inventory system. | | | | | |
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Common Size Reed’s Industry Cash $17 1.0% 1.5% Inventories 491 30.9 20.0 Accounts receivable 413 26.0 20.1 Total current assets $921 57.9
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ACC101 Financial Accounting 1 Name Quiz 5 Inventories MULTIPLE CHOICE _____ 1. The inventory costing method that reports the most current prices in ending inventory is a. | FIFO | b. | Specific identification | c. | LIFO | d. | Average cost | Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: Sep. 1 | Inventory | 20 units at $20 | 4 | Sold | 10 units | 10 | Purchased
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