BUSI 1003 Chapter Notes - Chapter 4: Income Statement, Current Asset, Accounts Receivable
28 Dec 2014
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Cost of merchandise sold - how much the merchandise was bought for (not sold for) Get by subtracting inventory from cost of merchandise available for sale. Gross profit - profit from selling merchandise before deducting operating expenses. (net sales - cost of merchandise sold) Merchandise inventory - inventory on hand at the end of an accounting period. Net sales = sales - returns and allowances - discounts. Sales - total amount charged to customers for merchandise, including cash sales and sales on account. Sales returns or allowances - granted by seller to buyer for damaged or defective merchandise. Buyer may return the merchandise or accept some money back. Sales discount - granted by seller to customer for early payment of amounts owed. Freight in - cost incurred in obtaining the merchandise. Cost of merchandise purchased - cost of net merchandise purchases plus freight in. Merchandise available for sale - beginning inventory added to cost of merchandise purchased.
