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  2. Merchandising companies must account for the following123:
    • The cost of the merchandise purchased for resale
    • The inventory of the goods
    • Sales transactions
    • Purchase and inventory transactions
    • Gross profit, which is an important financial measurement for merchandising businesses
    • Purchasing merchandise
    • Paying for merchandise
    • Storing inventory
    • Selling merchandise
    • Collecting customer payments
    • The operating cycle, which begins with the purchase of merchandise and ends with the collection of cash from sale of merchandise
    • Credit sales, which delay the receipt of cash until the account receivable balance is paid by the customer
    • Company assets tied up in the form of inventory or receivables, which are not enhancing the company’s value, but are a required part of business
    • Merchandise inventory, which is not productive (earning profit) until it is sold and any outstanding receivables are collected.
    Learn more:
    Merchandising businesses must accurately track the cost of the merchandise purchased for resale and the inventory of the goods. Accounting transactions for a merchandising business track sales transactions and purchase and inventory transactions. An important financial measurement for merchandising businesses is gross profit.
    accountinghowto.com/merchandising/
    Merchandising companies have financial transactions that include: purchasing merchandise, paying for merchandise, storing inventory, selling merchandise, and collecting customer payments.
    openstax.org/books/principles-financial-accounting/…

     A merchandising company’s operating cycle begins with the purchase of merchandise and ends with the collection of cash from sale of merchandise.  Credit sales delay the receipt of cash until the account receivable balance is paid by the customer.  Company assets tied up in the form of inventory or receivables are not enhancing the company’s value, but are a required part of business.  Merchandise inventory is not...

    www.studocu.com/en-ca/document/university-of-tor…
     
  3. People also ask
    What is merchandising accounting?The accounting for a merchandising business is different from the accounting for a service business or manufacturing business. Merchandising businesses must accurately track the cost of the merchandise purchased for resale and the inventory of the goods.
    What should a merchandising business consider?One of the first considerations for a merchandising business is to make a decision on how inventory will be tracked and valued. A business can use either a perpetual inventory method or a periodic inventory method.
    Is merchandising a service business?1. Merchandising businesses acquire merchandise for resale to customers. It is the selling of merchandise, instead of providing a service, that makes the activities of a merchandising business different from the activities of a service business. 2. Yes. Gross profit is the excess of sales over cost of merchandise sold.
    What is a merchandising business example?A merchandising business is a business that purchases goods and re-sells the goods to its customers. Examples of merchandising businesses are Amazon and Wal-mart. A non-profit can also have a merchandising business where it receives donated goods and sells them to customers.
     
  4. Accounting for a Merchandising Business | Accounting Student …

     
  5. WebAccounting. Financial Accounting (Lumen) 5: Accounting For a Merchandising Enterprise. 5.1: Merchandising Business. Expand/collapse global location. 5.1: Merchandising Business. Page ID. In Unit 1 we …

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