💼Merchandising businesses have specific accounts and transactions related to inventory and sales.
📦Shipping terms clarify who is responsible for shipping costs and ownership of goods in transit.
💰Merchandising businesses generate revenue through cash sales and sales on account.
📚Recording inventory and cost of goods sold depends on the inventory system used.
🔖Sales discounts are early payment discounts offered to customers and can also be offered to the business by suppliers.
What are the unique accounts and transactions in merchandising businesses?
—Merchandising businesses have specific accounts such as merchandise inventory and transactions like inventory purchases, shipping, and sales discounts.
How do shipping terms work in merchandising businesses?
—Shipping terms clarify who is responsible for shipping costs and ownership of goods in transit. The two common shipping terms used are Free On Board (FOB) Shipping Point and FOB Destination Point.
How do merchandising businesses generate revenue?
—Merchandising businesses generate revenue through cash sales, where customers pay at the time of sale, and sales on account, where customers pay at a later time.
How is inventory and cost of goods sold recorded in merchandising businesses?
—The recording of inventory and cost of goods sold depends on the inventory system used. Under the periodic system, no additional entries are made at the time of sale, while under the perpetual system, entries are made to record the reduction in inventory and increase in cost of goods sold.
What are sales discounts in merchandising businesses?
—Sales discounts are early payment discounts offered to customers to encourage early payment. Suppliers may also offer sales discounts to the business for early payment.
00:00Merchandising businesses have specific accounts and transactions related to inventory and sales.
00:19Shipping terms clarify who is responsible for shipping costs and ownership of goods in transit.
02:11Merchandising businesses generate revenue through cash sales and sales on account.
03:50The recording of inventory and cost of goods sold depends on the inventory system used.
04:52Sales discounts are early payment discounts offered to customers and can also be offered to the business by suppliers.
