Accounting for a Merchandising Business

  • Purchases
  • Sales
  • Freight In

Questions You Should be Able to Answer:

What are the journal entries to record the purchase and sale of merchandise?

What is the formula to determine the Cost of Goods Sold in a periodic inventory system?

What is the Freight In account?

How is the merchandise inventory shown on both the income statement and balance sheet?

Additional Practice and Review:

Page 402 Exercise 2, 3 and 4

page 406 Exercise 1 and 3