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# Financial Accounting–Inventory & Merchandising Transactions

## Merchandising transaction including purchase and sale of inventory, discounts, and returns. FIFO, LIFO, Average Methods

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## What you will learn

Inventory Costing

First In First Out (FIFO) cost flow method

Last In First Out (LIFO) cost flow method

Weighted average cost flow method

Periodic inventory method

Perpetual inventory method

Merchandising transactions

Record purchase of merchandise

Record the sale of merchandise

Perpetual and periodic inventory systems

Sales discount and purchase discount

Inventory shrinkage and sales returns

Financial statements for a merchandising company

Comprehensive problem of the entire accounting cycle

## Description

We cover merchandising transactions and cost flow assumptions.

Merchandising transaction, those transaction that deal with inventory, including the purchase of inventory and the sale of inventory. We will discuss related topics including sales discounts, purchase discounts, sales return and allowances, shrinkage and the cost of goods sold calculation. We will also compare and contrast a perpetual inventory system and periodic inventory system, listing and describing the pros and cons of each, explaining when each may be most appropriate in practice.

Inventory costs and cost flows, including what is included in the cost of inventory and how to account for inventory freight costs, inventory insurance costs, and discount. We also discuss inventory flow assumptions including specific identification, first in first out (FIFO), last in first out (LIFO), and weighted average methods. FIFO, LIFO and weighted average methods will be discussed using both a periodic inventory system and a perpetual inventory system.

•    Excel Practice Files

•    Multiple Choice Practice Questions

•    Short Calculation Practice Questions

•    Discussion Questions

The PDF files allow us to download reference information we can use offline and as a guide to help us work through the material.

Excel practice files will be preformatted so that we can focus on the adjusting process and learning some of the basics of Excel, like addition, subtraction, and cell relationships.

Multiple choice example question helps us improve our test-taking skills by reducing the information into the size and format of multiple choice questions and discussing how to approach these questions.

Short calculation questions help us reduce problems that have some calculation down to a short format that could be used in multiple choice questions.

Discussion Question will provide an opportunity to discuss these topics with the instructor and other students, a process many students find very helpful because it allows us to see the topic from different viewpoints.

Who will we be learning from?

You will be learning from somebody who has technical experience in accounting concepts and in accounting software like QuickBooks, as well as experience teaching and putting together curriculum.

You will be learning from somebody who is a:

•    CPA – Certified Public Accountant

•    CGMA – Chartered Global Management Accountant

•    Master of Science in Taxation

•    CPS – Certifies Post-Secondary Instructor

•    Curriculum Development Export

As a practicing CPA the instructor has worked with many technical accounting issues and helped work through them and discuss them with clients of all levels.

As a CPS and professor, the instructor has taught many accounting classes and worked with many students in the fields of accounting, business, and business applications.

The instructor also has a lot of experience designing courses and learning how students learn best and how to help students achieve their objectives. Experience designing technical courses has also benefit in being able to design a course in a logical fashion and deal with problems related to technical topics and the use of software like QuickBooks Pro.

Summary of what will be covered:

• Merchandising Transaction
• Purchase of merchandise or inventory
• Sale of merchandise or inventory
• Perpetual and Periodic Inventory System
• We will compare and contrast the perpetual and periodic inventory systems.
• Sales Discount & Purchase Discount
• It is easy to get the sales discount and purchase discount confused and mixed up. We will discuss both transactions and how to record them.
• Inventory Shrinkage & Sales Returns.
• Inventory Shrinkage has do do will  loss of inventory, the problem being how to know it is lost and how to record the loss. Sales return are when inventory is returned after a sale. We will record transactions related to sales returns.
• Financial Statements - Merchandising Company
• Financial statements, especially the income statement, are typically more complex for merchandising companies then service companies.
• Comprehensive Problems
• We will have to comprehensive problems, on focused on financial transactions, more of a mid sized problem. The second comprehensive problem will cover the full accounting cycle for a merchandising company, the recording of financial transaction, adjusting entries, financial statements, and closing process.
• Inventory Tracking methods
• Specific identification method
• First in first out (FIFO) method
• Last in first out (LIFO) method
• Weighted average method
• Inventory costs
• Fright
• Insurance
• Purchase discounts
• Periodic system verses a perpetual system.
• We discuss FIFO, LIFO, and weighted average under each system.
• Key definitions
• Comprehensive problem

## Content

Introduction

Introduction

Part One - Merchandising Transactions

Part One - Merchandising Transaction

Part 1 - Accounting Fundamentals and Merchandising Accounting Cycle

2 Accounting Fundamentals and Merchandising Accounting Cycle

100.90 Accounting Building Blocks (1)

200 Debits %26 Credits Normal Balance - Double Entry Accounting Sy

200 Journal Entry Thought Process - How To Record Journal Entries

PDF - 1 Operating Cycle

1 Accounting Cycle Merchandising Company

Accounting Comic Break

Accounting Comic Break

Part 1 Merchandising Transactions Overview

3 Merchandising Transactions Overview

PDF - 20 Merchandising transaction intro

20 500 - Merchandising Transaction Explained Purchaser and Se

PDF - 30 Merchandising Transaction purchase on account

30 500 Merchandising Transaction Journal Entry Purchaser

PDF - 40 Merchandising sale journal entry

40 500 Merchandising Transaction Sales Journal Entry - COGS Jou

Accounting Comic Break

Part 1 Perpetual and Periodic Inventory Systems

4 Perpetual and Periodic Inventory Systems Overview

PDF - 5 Periodic Inventory System

10 Periodic Inventory System

Worksheet Periodic System

PDF - 10 Perpetual Inventory System

5 Perpetual Inventory System

Worksheet - Perpetual Inventory System

PDF - 15 Perpetual vs Periodic

15 Perpetual vs. Periodic Inventory System

Accounting Comic Break

Part 1 Sales Discount & Purchase Discount

5 Sales Discount %26 Purchase Discount Overview

PDF - 50 Sales discount vs purchase discount

50 500 Sales Discount VS. Purchase Discount

PDF - 60 Merchandising Transaction purchase on account DIscount

60 500 Purchase Discount Journal Entry Explained

PDF - 70 Sales discount journal entry

70 500 Sales Discount Explained Journal Entry Record Discou

Worksheet Purchase Discount & Sales Discount

10 Multiple Choice Questions Merchandising Company

Accounting Comic Break

Part 1 Inventory Shrinkage & Sales Return

6 Inventory Shrinkage %26 Sales Returns

PDF - 90 Inventory Shrinkage

90 Inventory Shrinkage

Worksheet - Inventory Shrinkage

PDF - 100 Sales Return

100 Sales Return & Allowance Transaction

Worksheet - Sales Return

Accounting Comic Break

Part 1 Financial Statements - Merchandising Company

7 Financial Statements - Merchandising Company

Single Step Income Statement Review

110 500.20 Merchandising Financial Statements-Accounting instructions

20 Multiple Choice Questions Merchandising Company

Short Calculation 1

30 Multiple Choice Questions Merchandising Company

Accounting Comic Break

Part 1 Merchandising Transaction Problem

500.10 Merchandising Ex Part 1-Accounting%2C Financial (2)

500.20 Merchandising Ex Part 2-Accounting%2C Financial (1)

500.30 Merchandising Ex Part 3-Accounting%2C Financial (1)

500.40 Merchandising Ex Part 4-Accounting%2C Financial (1)

Short Calculation 2

Accounting Comic Break

Part 1 Definitions & Key Terms

45 Invoice Definition - What is Invoice%3F

Cash Discount Definition - What is a Cash Discount%3F

Credit Memorandum Definition - What is a Credit Memorandum%3F

Credit Period Definition -What is a Credit Period%3F

Credit Terms Definition -What are Credit Terms%3F

FOB Definition%2C Free on Board - FOB Shipping Point - FOB Destination - What is

Gross Margin Definition - What is Gross Margin%3F

Gross Margin Ratio Definition

Gross Profit Definition - What is Gross Profit%3F

Gross Profit Ratio Definition - What is gross profit ratio

Inventory Definition

Merchandise Definition

Multiple-Step Income Statement Definition - What is a Multiple-Step Income State

Periodic Inventory System Definition - What is Periodic Inventory System%3F

Perpetual Inventory System Definition - What is Perpetual Inventory System%3F

Purchase Discount Definition - What is Purchase Discount%3F

Sales Discount Definition - What is sales discount%3F

Shrinkage Definition - What is Shrinkage%3F

Single-Step Income Statement - What is a Singe-Step Income S

Wholesaler Definition - What is a Wholesaler%3F

Accounting Comic Break

Part Two - Inventory Costs & Cost Flows

Part Two Inventory Costs & Cost Flows

Part 2 Inventory Tracking & Inventory Methods

2 Inventory Tracking & Inventory Methods

PDF - 10 600 Inventory Tracking Explained - Introduction-Specific Ide

10 600 Inventory Tracking Explained - Introduction-Specific Ide

PDF - 15 600 Inventory Methods Explained and compared FIFO LIFO Ave

15 600 Inventory Methods Explained and compared FIFO LIFO Ave

Accounting Comic Break

Part 2 Inventory Cost, Principles, and Perpetual vs Periodic Inventory Systems

3 Inventory Cost, Principles, and Perpetual vs Periodic Methods

PDF - 17 Inventory Costs

17 Inventory Costs

PDF - 20 Consistency Concept

20 Consistency Concept

PDF - 30 Lower of Cost or Market

30 Lower of Cost or Market

PDF - 40 Perpetual & Periodic Inventory Systems

40 Perpetual & Periodic Inventory Systems

Multiple Choice 1 - Inventory Cost

Accounting Comic Break

Part 2 Periodic System First In First Out (FIFO)

4 Periodic System First In First Out (FIFO)

PDF - 42 First In First Out (FIFO) Periodic System

42 First In First Out (FIFO) Periodic System

Worksheet FIFO Periodic System

Multiple Choice 2 - Inventory Cost

Accounting Comic Break

Part 2 Periodic System Last In Last Out (LIFO)

5 Periodic System Last In First Out (LIFO)

PDF - 44 Last In First Out LIFO Periodic

44 Last In First Out LIFO Periodic

Worksheet Last In First Out (LIFO) Periodic System

Accounting Comic Break

Part 2 Periodic Weighted Average Method

6 Periodic Weighted Average Method

PDF - 46 Weighted Average Periodic System

46 Weighted Average Periodic System

Worksheet Weighted Average Periodic System

Multiple Choice 3 - Inventory Cost

Accounting Comic Break

Part 2 Perpetual System Fist In First Out (FIFO)

7 Perpetual System First In First Out (FIFO)

PDF - 50 600 First In First Out FIFO Explained

50 600 First In First Out FIFO Explained

Worksheet 600.10 Inventory Cost Problem First In First Out part 1 Ex.%2C how to

Worksheet 600.20 Inventory Cost Problem First In First Out part 2 Ex.%2C how to

Multiple Choice 4 - Inventory Cost

Accounting Comic Break

Part 2 Perpetual System Last In First Out (LIFO)

8 Perpetual System Last In First Out LIFO

PDF - 60 600 Last In First Out LIFO Inventory Method Explained

60 600 Last In First Out LIFO Inventory Method Explained

Worksheet 600.50 Cost Problem Last In First Out LIFO part 1 Ex.%2C how to calc

Worksheet 600.60 Cost Problem Last In First Out LIFO part 2 Ex.%2C how to calcul

Multiple Choice 5 Inventory Cost

Short Calculation 1

Accounting Comic Break

Part 2 Perpetual System Weighted Average Method

9 Perpetual System Weighted Average Method

PDF - 70 600 Average Inventory Method Explained

70 600 Average Inventory Method Explained

Worksheet 600.30 Inventory Cost Problem Average method Part 1 Ex.%2C how to calc

Worksheet - 600.40 Inventory Cost Problem Average method Part 2 Ex.%2C how to c

Multiple Choice 6 Inventory Cost

Short Calculation 2

Accounting Comic Break

Part 2 Definitions & Key Terms

10 Definitions & Key Terms

Average Cost Definition - What is Average Cost%3F

Conservatism Constraint Definition - What is Conservatism Co

Consignee Definition - What is Consignee%3F

Consignor Definition - What is a Consignor%3F

Consistency Concept Definition - What is Consistency Concept

Days Sales in Inventory Definition - What is days sales in i

First in First out Definition FIFO - What is First in First

Gross Profit Definition - What is Gross Profit%3F (1)

Interim Financial Statements Definition - What are Interim Financial Statements%

Inventory Turnover Definition - What is Inventory Turnover%3F

Last in First Out LIFO Definition - What is Last in First ou

Lower of Cost or Market Definition - What is Lower of Cost o

Net Realizable Value Definition - What is Net Realizable Val

Retail Inventory Method Definition - What is Retail Inventory Method%3F

Specific Identification Definition - What is Specific Identi

Weighted Average Definition - What is Weighted Average Metho

Accounting Comic Break

Part Three Comprehensive Problem

Part Three Comprehensive Problem

Comprehensive Problem

11 Comprehensive Problem

1 Accounting%2C Financial - Comp Problem Merchandising Co Journal Entries Part 1

2 Accounting%2C Financial - Comp Problem Merchandising Co Journal Entries Part 2

3.5 Accounting%2C Financial - Comp Problem Merchandising Co Journal Entries Part

4 Accounting%2C Financial - Comp Problem Merchandising Co %282%29. Journal Entri

5 Accounting%2C Financial - Comp Problem Merchandising Co. Journal Entries Part

6 Comp Problem Merchandising Co. Adjusting Entries Part 6

7 Accounting%2C Financial - Comp Problem Merchandising Co. Adjusting Entries Par

8 Accounting%2C Financial - Comp Problem Merchandising Co. Financial Statements

9 Accounting%2C Financial - Comp Problem Merchandising Co. Financial Statements

10 Accounting%2C Financial - Comp Problem Merchandising Co. Financial Statements

11 Accounting%2C Financial - Comp Problem Merchandising Co. Financial Statements

12 Accounting%2C Financial - Comp Problem Merchandising Co. Closing Entries Part

13 Accounting%2C Financial - Comp Problem Merchandising Co. Closing Entries Part

Accounting Comic Break

## Reviews

D
Daniel1 September 2020

Best Tuition with vivid examples Very enlightening and I'm glad I signed up, am gonna purchase all of Bob Steele's lectures With no knowledge at all, you can start and learn through the course, I promise you'll never regret it. I've not seen better online lectures like this one

S
S30 October 2019

Very clear explanation. Succinct, superb presentation skill, step by step professional teaching. It is an enjoyment to watch this course! Highly recommended!

B
Bobbie3 May 2018

Genuine course packed full of information on inventory and merchandising transactions. Very well explained and demonstrated. Thank you.

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Udemy ID

## 3/20/2018

Course created date

## 4/1/2020

Course Indexed date
Lee Jia Cheng
Course Submitted by