Comparing The Operations Of Service Providers With Merchandisers

1406 Words Jun 12th, 2016 null Page
Chapter #6 – Merchandisers
After comparing the operations of service providers with merchandisers, the related differences on the balance sheet and income statement are highlighted. Then, a line-by-line look at a merchandiser’s multi-step income statement is provided. The importance of inventory management is stressed. On-Target Supplies and Logistics is a real world example of a company that uses electronic data gathering, but also performs a physical inventory count to ensure that its records are accurate. Radio Shack is a real world example of a company that is concerned with the loss of inventory. The video concludes with overviews of the perpetual and periodic inventory methods.

Inventory management is one of the important aspects of accounting. Both perpetual and periodic methods use to track inventories. The periodic technique uses for reporting financial statement while the perpetual uses for internal management. Inventory account the largest asset on nonservice industry balance sheet and largest expense on income statements. In such business net income is just a fraction of net sale, the net sale is the difference between net sale and cost of good sold and total added other expenses. On the income statement, the cost of good sold primary includes the amount of mechanic’s inventory at the end of the period subtracts goods available for sale. On target supplies and logistics is one of many manufacturing companies uses both electronic data gathering but also performs…

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