Ac Wk4

Week 4: Merchandising Operations, Income Statements, and Inventory Cost

-

Flow

Assumptions

In this area, we will discuss the accounting

-

for

-

inventory transactions of merchandising

companies, the two formats of preparing the income statement, and how to evaluate the

profitability of a merchandising company. We will also discuss how companies dete

rmine the

year

-

end inventory value and cost of goods sold using one of the cost

-

flow assumptions. Finally,

we will examine the impact of choosing a certain cost

-

flow assumption on the tax liability and

other financial statement numbers of a company.

Q.1

How is the income statement of a merchandising company different from that of a

service company?

Q.2

What is the difference between a service

-

oriented company and a merchandising

company

?

Notes:

1. Include in your post that you

attended

the live

lecture

2. provide a summary of your key takeaways from the lecture

Book for references

Financial Accounting: Tools for Business Decision Making

9

th

Kimmel, Weygandt and Kieso

2019 Wiley

Week 4: Merchandising Operations, Income Statements, and Inventory Cost-Flow

Assumptions

In this area, we will discuss the accounting-for-inventory transactions of merchandising

companies, the two formats of preparing the income statement, and how to evaluate the

profitability of a merchandising company. We will also discuss how companies determine the

year-end inventory value and cost of goods sold using one of the cost-flow assumptions. Finally,

we will examine the impact of choosing a certain cost-flow assumption on the tax liability and

other financial statement numbers of a company.

Q.1 How is the income statement of a merchandising company different from that of a

service company?

Q.2 What is the difference between a service-oriented company and a merchandising

company?

Notes:

1. Include in your post that you attended the live lecture

2. provide a summary of your key takeaways from the lecture

Book for references

Financial Accounting: Tools for Business Decision Making 9

th

Kimmel, Weygandt and Kieso

2019 Wiley