• Post category:StudyBullet-6

Merchandising transaction including purchase and sale of inventory, discounts, and returns. FIFO, LIFO, Average Methods

What you will learn

### Comprehensive problem of the entire accounting cycle

Description

We cover merchandising transactions and cost flow assumptions.

Merchandising transaction, those transaction that deal with inventory, including the purchase of inventory and the sale of inventory. We will discuss related topics including sales discounts, purchase discounts, sales return and allowances, shrinkage and the cost of goods sold calculation. We will also compare and contrast a perpetual inventory system and periodic inventory system, listing and describing the pros and cons of each, explaining when each may be most appropriate in practice.

Inventory costs and cost flows, including what is included in the cost of inventory and how to account for inventory freight costs, inventory insurance costs, and discount. We also discuss inventory flow assumptions including specific identification, first in first out (FIFO), last in first out (LIFO), and weighted average methods. FIFO, LIFO and weighted average methods will be discussed using both a periodic inventory system and a perpetual inventory system.

•    Excel Practice Files

•    Multiple Choice Practice Questions

•    Short Calculation Practice Questions

•    Discussion Questions

The PDF files allow us to download reference information we can use offline and as a guide to help us work through the material.

Excel practice files will be preformatted so that we can focus on the adjusting process and learning some of the basics of Excel, like addition, subtraction, and cell relationships.

Multiple choice example question helps us improve our test-taking skills by reducing the information into the size and format of multiple choice questions and discussing how to approach these questions.

Short calculation questions help us reduce problems that have some calculation down to a short format that could be used in multiple choice questions.

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Discussion Question will provide an opportunity to discuss these topics with the instructor and other students, a process many students find very helpful because it allows us to see the topic from different viewpoints.

Who will we be learning from?

You will be learning from somebody who has technical experience in accounting concepts and in accounting software like QuickBooks, as well as experience teaching and putting together curriculum.

You will be learning from somebody who is a:

•    CPA – Certified Public Accountant

•    CGMA – Chartered Global Management Accountant

•    Master of Science in Taxation

•    CPS – Certifies Post-Secondary Instructor

•    Curriculum Development Export

As a practicing CPA the instructor has worked with many technical accounting issues and helped work through them and discuss them with clients of all levels.

As a CPS and professor, the instructor has taught many accounting classes and worked with many students in the fields of accounting, business, and business applications.

The instructor also has a lot of experience designing courses and learning how students learn best and how to help students achieve their objectives. Experience designing technical courses has also benefit in being able to design a course in a logical fashion and deal with problems related to technical topics and the use of software like QuickBooks Pro.

Summary of what will be covered:

• Merchandising Transaction
• Purchase of merchandise or inventory
• Sale of merchandise or inventory
• Perpetual and Periodic Inventory System
• We will compare and contrast the perpetual and periodic inventory systems.
• Sales Discount & Purchase Discount
• It is easy to get the sales discount and purchase discount confused and mixed up. We will discuss both transactions and how to record them.
• Inventory Shrinkage & Sales Returns.
• Inventory Shrinkage has do do will  loss of inventory, the problem being how to know it is lost and how to record the loss. Sales return are when inventory is returned after a sale. We will record transactions related to sales returns.
• Financial Statements – Merchandising Company
• Financial statements, especially the income statement, are typically more complex for merchandising companies then service companies.
• Comprehensive Problems
• We will have to comprehensive problems, on focused on financial transactions, more of a mid sized problem. The second comprehensive problem will cover the full accounting cycle for a merchandising company, the recording of financial transaction, adjusting entries, financial statements, and closing process.
• Inventory Tracking methods
• Specific identification method
• First in first out (FIFO) method
• Last in first out (LIFO) method
• Weighted average method
• Inventory costs
• Fright
• Insurance
• Purchase discounts
• Periodic system verses a perpetual system.
• We discuss FIFO, LIFO, and weighted average under each system.
• Key definitions
• Comprehensive problem
English
language

Content

Introduction

### Part One – Merchandising Transactions

Part One – Merchandising Transaction

### Part 1 – Accounting Fundamentals and Merchandising Accounting Cycle

2 Accounting Fundamentals and Merchandising Accounting Cycle
100.90 Accounting Building Blocks (1)
200 Debits %26 Credits Normal Balance – Double Entry Accounting Sy
200 Journal Entry Thought Process – How To Record Journal Entries
PDF – 1 Operating Cycle
1 Accounting Cycle Merchandising Company
Accounting Comic Break
Accounting Comic Break

### Part 1 Merchandising Transactions Overview

3 Merchandising Transactions Overview
PDF – 20 Merchandising transaction intro
20 500 – Merchandising Transaction Explained Purchaser and Se
PDF – 30 Merchandising Transaction purchase on account
30 500 Merchandising Transaction Journal Entry Purchaser
PDF – 40 Merchandising sale journal entry
40 500 Merchandising Transaction Sales Journal Entry – COGS Jou
Accounting Comic Break

### Part 1 Perpetual and Periodic Inventory Systems

4 Perpetual and Periodic Inventory Systems Overview
PDF – 5 Periodic Inventory System
10 Periodic Inventory System
Worksheet Periodic System
PDF – 10 Perpetual Inventory System
5 Perpetual Inventory System
Worksheet – Perpetual Inventory System
PDF – 15 Perpetual vs Periodic
15 Perpetual vs. Periodic Inventory System
Accounting Comic Break

### Part 1 Sales Discount & Purchase Discount

5 Sales Discount %26 Purchase Discount Overview
PDF – 50 Sales discount vs purchase discount
50 500 Sales Discount VS. Purchase Discount
PDF – 60 Merchandising Transaction purchase on account DIscount
60 500 Purchase Discount Journal Entry Explained
PDF – 70 Sales discount journal entry
70 500 Sales Discount Explained Journal Entry Record Discou
Worksheet Purchase Discount & Sales Discount
10 Multiple Choice Questions Merchandising Company
Accounting Comic Break

### Part 1 Inventory Shrinkage & Sales Return

6 Inventory Shrinkage %26 Sales Returns
PDF – 90 Inventory Shrinkage
90 Inventory Shrinkage
Worksheet – Inventory Shrinkage
PDF – 100 Sales Return
100 Sales Return & Allowance Transaction
Worksheet – Sales Return
Accounting Comic Break

### Part 1 Financial Statements – Merchandising Company

7 Financial Statements – Merchandising Company
Single Step Income Statement Review
110 500.20 Merchandising Financial Statements-Accounting instructions
20 Multiple Choice Questions Merchandising Company
Short Calculation 1
30 Multiple Choice Questions Merchandising Company
Accounting Comic Break

### Part 1 Merchandising Transaction Problem

500.10 Merchandising Ex Part 1-Accounting%2C Financial (2)
500.20 Merchandising Ex Part 2-Accounting%2C Financial (1)
500.30 Merchandising Ex Part 3-Accounting%2C Financial (1)
500.40 Merchandising Ex Part 4-Accounting%2C Financial (1)
Short Calculation 2
Accounting Comic Break

### Part 1 Definitions & Key Terms

45 Invoice Definition – What is Invoice%3F
Cash Discount Definition – What is a Cash Discount%3F
Credit Memorandum Definition – What is a Credit Memorandum%3F
Credit Period Definition -What is a Credit Period%3F
Credit Terms Definition -What are Credit Terms%3F
FOB Definition%2C Free on Board – FOB Shipping Point – FOB Destination – What is
Gross Margin Definition – What is Gross Margin%3F
Gross Margin Ratio Definition
Gross Profit Definition – What is Gross Profit%3F
Gross Profit Ratio Definition – What is gross profit ratio
Inventory Definition
Merchandise Definition
Multiple-Step Income Statement Definition – What is a Multiple-Step Income State
Periodic Inventory System Definition – What is Periodic Inventory System%3F
Perpetual Inventory System Definition – What is Perpetual Inventory System%3F
Purchase Discount Definition – What is Purchase Discount%3F
Sales Discount Definition – What is sales discount%3F
Shrinkage Definition – What is Shrinkage%3F
Single-Step Income Statement – What is a Singe-Step Income S
Wholesaler Definition – What is a Wholesaler%3F
Accounting Comic Break

### Part Two – Inventory Costs & Cost Flows

Part Two Inventory Costs & Cost Flows

### Part 2 Inventory Tracking & Inventory Methods

2 Inventory Tracking & Inventory Methods
PDF – 10 600 Inventory Tracking Explained – Introduction-Specific Ide
10 600 Inventory Tracking Explained – Introduction-Specific Ide
PDF – 15 600 Inventory Methods Explained and compared FIFO LIFO Ave
15 600 Inventory Methods Explained and compared FIFO LIFO Ave
Accounting Comic Break

### Part 2 Inventory Cost, Principles, and Perpetual vs Periodic Inventory Systems

3 Inventory Cost, Principles, and Perpetual vs Periodic Methods
PDF – 17 Inventory Costs
17 Inventory Costs
PDF – 20 Consistency Concept
20 Consistency Concept
PDF – 30 Lower of Cost or Market
30 Lower of Cost or Market
PDF – 40 Perpetual & Periodic Inventory Systems
40 Perpetual & Periodic Inventory Systems
Multiple Choice 1 – Inventory Cost
Accounting Comic Break

### Part 2 Periodic System First In First Out (FIFO)

4 Periodic System First In First Out (FIFO)
PDF – 42 First In First Out (FIFO) Periodic System
42 First In First Out (FIFO) Periodic System
Worksheet FIFO Periodic System
Multiple Choice 2 – Inventory Cost
Accounting Comic Break

### Part 2 Periodic System Last In Last Out (LIFO)

5 Periodic System Last In First Out (LIFO)
PDF – 44 Last In First Out LIFO Periodic
44 Last In First Out LIFO Periodic
Worksheet Last In First Out (LIFO) Periodic System
Accounting Comic Break

### Part 2 Periodic Weighted Average Method

6 Periodic Weighted Average Method
PDF – 46 Weighted Average Periodic System
46 Weighted Average Periodic System
Worksheet Weighted Average Periodic System
Multiple Choice 3 – Inventory Cost
Accounting Comic Break

### Part 2 Perpetual System Fist In First Out (FIFO)

7 Perpetual System First In First Out (FIFO)
PDF – 50 600 First In First Out FIFO Explained
50 600 First In First Out FIFO Explained
Worksheet 600.10 Inventory Cost Problem First In First Out part 1 Ex.%2C how to
Worksheet 600.20 Inventory Cost Problem First In First Out part 2 Ex.%2C how to
Multiple Choice 4 – Inventory Cost
Accounting Comic Break

### Part 2 Perpetual System Last In First Out (LIFO)

8 Perpetual System Last In First Out LIFO
PDF – 60 600 Last In First Out LIFO Inventory Method Explained
60 600 Last In First Out LIFO Inventory Method Explained
Worksheet 600.50 Cost Problem Last In First Out LIFO part 1 Ex.%2C how to calc
Worksheet 600.60 Cost Problem Last In First Out LIFO part 2 Ex.%2C how to calcul
Multiple Choice 5 Inventory Cost
Short Calculation 1
Accounting Comic Break

### Part 2 Perpetual System Weighted Average Method

9 Perpetual System Weighted Average Method
PDF – 70 600 Average Inventory Method Explained
70 600 Average Inventory Method Explained
Worksheet 600.30 Inventory Cost Problem Average method Part 1 Ex.%2C how to calc
Worksheet – 600.40 Inventory Cost Problem Average method Part 2 Ex.%2C how to c
Multiple Choice 6 Inventory Cost
Short Calculation 2
Accounting Comic Break

### Part 2 Definitions & Key Terms

10 Definitions & Key Terms
Average Cost Definition – What is Average Cost%3F
Conservatism Constraint Definition – What is Conservatism Co
Consignee Definition – What is Consignee%3F
Consignor Definition – What is a Consignor%3F
Consistency Concept Definition – What is Consistency Concept
Days Sales in Inventory Definition – What is days sales in i
First in First out Definition FIFO – What is First in First
Gross Profit Definition – What is Gross Profit%3F (1)
Interim Financial Statements Definition – What are Interim Financial Statements%
Inventory Turnover Definition – What is Inventory Turnover%3F
Last in First Out LIFO Definition – What is Last in First ou
Lower of Cost or Market Definition – What is Lower of Cost o
Net Realizable Value Definition – What is Net Realizable Val
Retail Inventory Method Definition – What is Retail Inventory Method%3F
Specific Identification Definition – What is Specific Identi
Weighted Average Definition – What is Weighted Average Metho
Accounting Comic Break

### Part Three Comprehensive Problem

Part Three Comprehensive Problem

### Comprehensive Problem

11 Comprehensive Problem
1 Accounting%2C Financial – Comp Problem Merchandising Co Journal Entries Part 1
2 Accounting%2C Financial – Comp Problem Merchandising Co Journal Entries Part 2
3.5 Accounting%2C Financial – Comp Problem Merchandising Co Journal Entries Part
4 Accounting%2C Financial – Comp Problem Merchandising Co %282%29. Journal Entri
5 Accounting%2C Financial – Comp Problem Merchandising Co. Journal Entries Part
6 Comp Problem Merchandising Co. Adjusting Entries Part 6
7 Accounting%2C Financial – Comp Problem Merchandising Co. Adjusting Entries Par
8 Accounting%2C Financial – Comp Problem Merchandising Co. Financial Statements
9 Accounting%2C Financial – Comp Problem Merchandising Co. Financial Statements
10 Accounting%2C Financial – Comp Problem Merchandising Co. Financial Statements
11 Accounting%2C Financial – Comp Problem Merchandising Co. Financial Statements
12 Accounting%2C Financial – Comp Problem Merchandising Co. Closing Entries Part
13 Accounting%2C Financial – Comp Problem Merchandising Co. Closing Entries Part
Accounting Comic Break