Business Administration 2257 Chapter Notes - Chapter 5: Sales Taxes In Canada, Perpetual Inventory, Sales Tax

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Eleni Petrou

Document Summary

Merchandising involves purchasing products (inventory to resell to customers) Inventory for merchandising company can consist of many items. They are in a form ready to sell to customers. Merchandise inventory = is needed to describe the many different items that make up total inventory. Retailers = merchandising companies that purchase and sell directly to consumers. Wholesalers = merchandising companies that sell to retailers. Manufacturers = companies that produce goods for sale to wholesalers. Inventory is classified into 3 categories by manufacturing companies: Basic goods and materials that are on hand and will be used in production. Portion of inventory which production has started but not yet complete. Operating cycle = the time it takes to go from cash to cash in producing revenues (usually longer for a merchandising company than for a service company) Measuring profit for merchandising company is the same for a service company.