ACC 100

Anything you sell for a profit is inventory (merchandise)

o A company can buy and sell equipment as part of
inventory
o However, equipment that a business uses is always
equipment.
COGS: Income statement (expense)
o Sales COGS + Profit
Inventory Systems:
o Perpetual:
Constantly updating inventory/COGS
Gets updated every time there is an inflow/outflow of
inventory
o Periodic:
Only updated at a certain fiscal period
o Always make 2 transaction when selling inventory
FOB Shipping Point:
o Buyer pays and owns it in transit
o Cost added to inventory account
FOB Destination:
o Seller pays and owns it in transit
o Expensed as used to generate revenue
Sellers will prefer terms in which money is provided to them in
the shortest amount of time
Returns = Reverse: Reverse part or whole of the transaction
from when it was recorded depending on how much was returned

Gross Profit % = Gross Profit

Net Sales
= 43%

Profit % = Profit
Net Sales
= 36%