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the operating expenses sectionoperating expenses - directly associated to the sale of merchandisegeneral expenses administrative expenses related to
determine about the revenue sectionrevenue section provides a figure for net sales which is balance of the sales account less the balances of contra
determine the symbols of net sales for the period- cost of goods sold gross profit- operating expenses
classified income statementit is more involved for a merchandising business to conclude net loss or net income income statement is categorized into
preparing financial statements for a merchandising businessthe statements are completed in this order1 income statement contains only expenses
what is the end-of-period worksheetshow trial balance-debits must equal creditsshow adjustments-debits must equal creditscarry adjustments forward to
state the steps of merchandise inventory1 transfer the beginning inventory figuredebit income summary for beginning inventory amountcredit
explain in detail about the merchandise inventorycost of merchandise purchased during an accounting period is debited to purchases account to
determining needed adjustmentsadjustments are required since certain changes take place during the accounting period as time passes although the
prepare a trial balance all account names would be listed in left-hand column place the account balance in appropriate debit or credit column for
state the list of special journalspurchases - all credit purchases of merchandisecash payments - all payments of cashsales - all credit sales of
recording private company credit card salesgoes to the individual company-not a banktreated as a sale on accountcredit card company is responsible
determine the types of credit card salesbank credit card sales - most retail businesses accept bank credit cards treated as a cash salerecording bank
state about the reporting sales taxes collectedsales tax payable - credit balancesales returns involving a sales taxtax should also be returned to
sales taxes and schedule of accounts receivable schedule of accounts receivable accounts receivable and individual accounts should match only
sales discounts and cash receipts journalsales discountssales discount is recorded as a reduction in sales revenue cash receipts journalsource
determine about the sales returns and allowancesallowance results when a buyer decides to keep defective or damaged goods though at a reduction from
what is acounts receivable ledgerbusinesses have several customers and individual businesses arent assigned an account number they are just in
determine the terms of recording sales of merchandisethe sales account is a temporary account with a normal credit balance its only used to record
explain the terms of paymentrevolving charge plans are set up so that you can pay a percentage plus a finance charge on a monthly basiscredit terms -
determine in brief about the sales activityjust as merchandizing businesses follow specific procedures to process and record purchases they follow
schedule of accounts payable lists the balances of accounts payable ledger and accounts payable controlling account demonstrates the total amount
benefits of purchases discountspurchases discounts account is used to record discounts given for prompt paymentto prove accounts payable ledger you
state about the cash payments journala special journal used to record any payment of cash there would be a check number given to be recorded in
determine about the debit memoranduma debit memorandum is the buyers written request to seller for credit individual account is debited to reduce the