Fa, M, N I

In: Business and Management

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Unit I Accounting for Merchandising Business
Overview
Background

Merchandising business deals primarily with the buying and selling of finished goods. This unit will introduce readers on the different activities done by a trading business. A brief discussion of the perpetual inventory systems is also included.

Purpose

The purpose of Unit I “Accounting for Merchandising Business ” is to illustrate the various buying and selling activities of a trading business. This unit also illustrates the basic entries using perpetual inventory system. A brief discussion of business documents are also included to give readers ideas of what are the basic papers being used that support a merchandising transaction.

In this unit

This unit contains the following topics: Topics Merchandising Business Inventory System Merchandise Accounts Business Documents Proprietor’s Investment and Withdrawal Purchase of Merchandise Purchase Returns and Allowances Discounts on Purchases Sales Sales Returns and Allowances Discounts on Sales Freight on Merchandise Income Statement Review Questions Exercises See Page 2 of F 3 of F 7 of F 9 of F 14 of F 15 of F 18 of F 20 of F 25 of F 27 of F 28 of F 29 of F 33 of F 38 of F 39 of F

Marivic D. Valenzuela-Manalo

Page 1of F

Merchandising Business
Overview

An organization that is engaged in the buying and selling of goods or merchandise is a merchandising or trading concern. Merchandise refers to goods purchased for resale in the same form. Unlike businesses rendering services for compensation, a trading concern derives its income through the resale at a profit of the merchandise purchased.

Activities

The activities of a merchandising concern that distinguish it from a service concern cover the following:
• Purchasing. Information as to the kind, quality, quantity, and cost of goods

bought should be maintained for the…...

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