MGT 11A Chapter 4: CHAPTER 4
Document Summary
Merchandise: products that a company buys to resell. Merchandiser: earns net income by buying and selling merchandise. Wholesalers: buys products from manufacturers and sells them to retailers. Retailer: buys products from manufacturers or wholesalers and sells them to consumers. Net income = revenues from selling merchandise - cost of merchandise sold and other expenses. Also reports gross profit (gross margin): net sales - cost of goods sold. Difference is that it doesn"t include other expenses . Merchandise inventory (inventory): products that a company owns and intends to sell. Inventory cost includes cost to buy the goods, ship them to the store, and make them ready for sale. Perpetual inventory system: updates accounting periods for each purchase and each sale of inventory. Periodic inventory system: updates accounting records for purchases and sales of inventory only at the end of a period.
