MUHASEBE I

Grocery store is a merchandising company.

Barbershop market is a merchandising company.

A retailer buys merchandise inventory either from a producer or a wholesaler and then sells those goods to consumers.

A whole seller buts merchandising inventory from a
producer and then sells them to retailers.

The operating cycle of a merchandising company starts with the purchase of inventories from a producer or an individual, called a vendor. Then these inventories are sold to customers, either in cash or on account. When the cash is collected from customers, the operating cycle ends the first round.

Operating cycle begins with the purchase of
merchandise inventory and ends when the
cash from sales is collected from customers.

When COGS is deducted from sales revenue, gross profit is calculated. Gross profit evaluates the company’s profitability in terms of selling activities.

COGS = Beginning Inventory + Purchases – Ending Inventory

Grocery market is a merchandising company. Audit firm, barbershop and tourism agency are service companies. Carpenter shop is a manufacturing company.

Operating cycle begins with the purchase of merchandise inventory and ends when the cash from sales is collected from customers.

These companies purchase the goods that are ready to be sold and sell them to generate revenue. Considering the type of their customers, merchandising companies are called either as retailer or whole seller.

Periodic inventory system is used by the companies with inexpensive inventories and manual accounting systems. However, with the increased use of technology in all areas of businesses, this system is preferred less day-by-day. The other information is true for companies using perpetual inventory system.

300.000 + 150.000 - 100.000 =350.000 

COGS = Beginning Inventory + Purchases – Ending Inventory

Taxes, such as Value Added Tax (VAT), are deducted from the amount of tax that the company should pay the government at the end of an accounting period. These types of recoverable amounts are not included in the cost of merchandise inventory, as companies benefit from those payments in terms of decreases in tax liability, not as sales revenue.

Purchase returns exist when sellers allow purchasers to return merchandise that is defective, damaged, or under-performing.

3500 * 3%= 105 cash discount

3500-105=3395.

Net Cost of Inventory Purchased = Purchase cost inventory – Purchase returns and allowances – Purchase discounts + Freight in

=140.000-25.000=115.000

150 *1.000 TL = 150.000TL (debited Cash and credited Sales Revenue)

Sales Returns and Allowances           5.000

                  Accounts Receivable              5.000