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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting for a Merchandising Business Organized as a Corporation In the previous units we.

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Presentation on theme: "CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting for a Merchandising Business Organized as a Corporation In the previous units we."— Presentation transcript:

1 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting for a Merchandising Business Organized as a Corporation In the previous units we looked at the accounting cycle for a service business organized as a sole proprietorship. Remember these slides are available on the class website! 1 LESSON 9-1

2 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting for a Merchandising Business Organized as a Corporation In the previous units we looked at the accounting cycle for a service business organized as a sole proprietorship. So, what is it that a service business sells? 2 LESSON 9-1

3 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting for a Merchandising Business Organized as a Corporation Now we will begin examining the accounting cycle for a merchandizing business organized as a corporation. 3 LESSON 9-1

4 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting for a Merchandising Business Organized as a Corporation Now we will begin examining the accounting cycle for a merchandizing business organized as a corporation. So how does a merchandising business differ from a service business? 4 LESSON 9-1

5 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting for a Merchandising Business Organized as a Corporation What does a merchandising business do? 5 LESSON 9-1

6 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting for a Merchandising Business Organized as a Corporation What does a merchandising business do? A merchandising business purchases goods to sell. Think of Target or a retail store. 6 LESSON 9-1

7 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Accounting for a Merchandising Business Organized as a Corporation Ownership In the previous units the businesses we evaluated were sole proprietorships, meaning there was only one owner. Now we are examining a corporation, which has multiple owners. 7 LESSON 9-1

8 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 9-1 TERMS merchandise merchandising business retail merchandising business wholesale merchandising business corporation share of stock capital stock stockholder special journal cost of merchandise markup vendor purchase on account purchases journal special amount column purchase invoice terms of sale page 241

9 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Using Special Journals A business with a limited number of daily transactions may record all entries in one general journal. However, a business with many different types of daily transactions may chose to use a separate journal for each kind of transaction.

10 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Using Special Journals Special journals we will examine include: Purchase Journal – for all purchase of merchandise on account. Cash Payments Journal – for all cash payments Sales Journal – for all sales of merchandise on account Cash Receipts Journal –for cash receipts

11 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Using Special Journals Journalizing Purchases Using a Purchases Journal

12 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 9-1 PURCHASING MERCHANDISE page 236 Think of it like purchasing supplies but you will latter sell this merchandise.

13 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 13 LESSON 9-1 PURCHASES ON ACCOUNT page 236

14 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 14 LESSON 9-1 PURCHASES JOURNAL page 237 What is different about this journal from a general journal?

15 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 15 LESSON 9-1 PURCHASE INVOICE page 238 Need to verify purchase invoice against purchase order

16 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 16 LESSON 9-1 PURCHASING MERCHANDISE ON ACCOUNT page 239 November 2. Purchased merchandise on account from Crown Distributing, $2, Purchase Invoice No. 83.


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