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Merchandize Inventory: Sales and Collection Using the Perpetual Inventory System

19 January, 2016 - 16:24
LO3 – Analyze and record sales transactions for a merchandizer.
 

In addition to purchases on account, a merchandizing company’s operating cycle includes the sale of merchandize inventory on accountor on credit as highlighted in Figure 5.3.

Figure 5.3 Sales and Collection Portion of the Operating Cycle 
 

There are some slight recording differences when revenue is earned in a merchandizing company. These are discussed below.