Funac Reviewer PDF

MERCHANDISING BUSINESS PERPETUAL METHOD - There is a product being sold. - Records continuously or perpetually the - Buying and selling. movement of the merchandise MERCHANDISER PERIODIC SYSTEM - The on...

MERCHANDISING BUSINESS PERPETUAL METHOD - There is a product being sold. - Records continuously or perpetually the - Buying and selling. movement of the merchandise MERCHANDISER PERIODIC SYSTEM - The one who buys and sells goods or - No detailed or continuous recording of merchandise. goods in this method. - May be a wholesaler or retailer. o Wholesaler – buys in bulk from a - Inventory Count - Internal control manufacturer and sells them to retailers. requires that a physical count be made. o Retailer – sells directly to customers. - Inventory Sheet – Contained in a source document with a list of closing stock. MERCHANDISE INVENTORY - Stock Cards – Maintained for each kind of - The stock of goods which a merchandiser item purchased to make it easy to track buys and sells. down SALES REVENUE FIFO COSTING METHOD Normal Balance is Credit Follows the natural flow of goods from the Account title used by merchandiser for oldest bought to the latest. receipts coming from goods sold to clients. GROSS SALES COST OF SALES Earned when the merchandiser transfers The cost of the merchandise. the goods to the customer. This is deducted from the sales revenue to arrive at the gross profit. Trade Discounts – Percentage reduction from a published list price may be granted 2 Categories of Expense: to retailers or wholesalers for buying large 1. Cost of Goods Sold – Capital. quantities of goods or for regularly 2. Operating Expenses – Expenses patronizing the business. incurred in the process of earning sales revenue. Cash Discounts – When goods that are sold on account, terms of payment depend GROSS PROFIT on the custom of the industry. - Represents the mark-up on the cost price SALES RETURNS AND ALLOWANCES OPERATING PROFIT - A customer may return merchandise - Results after deducting the operating if it is defective or damaged. expenses from the gross profit. NET SALES At the end of the accounting period, NON-OPERATING ACTIVITIES several accounts are deducted from gross - Refers to the minor income and expenses sales to arrive at the net sales revenue. and not part of a regular operation. GROSS PURCHASES INPUT TAX Represents a decrease in owner’s equity Each time a purchase is made, and a 12% account for cost of goods expense. VAT is included. OUTPUT TAX FREIGHT IN Each time a sale of goods or service is FOB Shipping Point – The title of made by a VAT registered business or ownership passes to the buyer as soon as practitioner, and a 12% VAT is charged to the seller turns over the goods to a common the customer of client increasing the amount carrier. to be collected. FREIGHT OUT SPECIAL JOURNALS FOB Destination (Free On-Board It requires businesses to identify their Destination) – The seller is liable for the major transactions. freight and is still considered the owner of four major areas: Cash the goods until it reaches the buyer. Receipts, Cash disbursements, sales, and purchases. PURCHASE RETURNS AND ALLOWANCES SUBSIDIARY LEDGERS Goods bought may be returned to the Accounts that are considered subsets of seller for being (1) defective, (2) damaged, the general ledger. and (3) not as ordered. PURCHASES JOURNALS PURCHASE DISCOUNTS Used to record individually purchase of Decreasing the liability to be paid by the goods on account. buyer. SALES JOURNALS NET COST OF PURCHASES Used to record individually sale of goods From Gross Purchases, Freight-In is on account. added to arrive at Total Cost of Delivered Goods. CASH RECEIPTS JOURNALS Book of original entry where all cash OPERATING EXPENSES transactions are recorded, primarily 1. Selling (Distribution) Expense – transactions related to cash receipts, such Incurred in storing, promoting, packaging, as owner’s cash investments, loans, cash and delivering the merchandise. sales, collection of customers’ account, and 2. Administrative (General) Expense – cash refund. Expenses needed in the general administration of the office other than the CASH DISBURSEMENTS JOURNALS store. Book of original entry where all cash transactions are recorded, primarily VALUE ADDED TAX (VAT) transactions related to cash payments, such - Tax levied by the government to certain as cash purchases, payment of liabilities providers of goods and services. and expenses, cash withdrawals, and cash refunds.