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30-Day Money-Back Guarantee

This course includes:

  • 22 hours on-demand video
  • 39 downloadable resources
  • Full lifetime access
  • Access on mobile and TV
  • Assignments
Business Operations Financial Accounting

Financial Accounting–Inventory & Merchandising Transactions

Merchandising transaction including purchase and sale of inventory, discounts, and returns. FIFO, LIFO, Average Methods
Rating: 3.8 out of 53.8 (97 ratings)
17,370 students
Created by Robert (Bob) Steele
Last updated 6/2019
English
English [Auto]
30-Day Money-Back Guarantee

What you'll 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

Requirements

  • We should have a basic understanding of financial accounting and debits and credits.

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. 

In addition to instructional video, this course will include downloadable

•    Downloadable PDF Files

•    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

    Who this course is for:

    • Accounting students
    • Business owner
    • Anyone who whats to learn accounting

    Course content

    22 sections • 186 lectures • 21h 55m total length

    • Preview09:01
    • Discussion Question 1
      1 question

    • Preview01:29

    • Preview00:55
    • Preview11:08
    • Preview10:35
    • 200 Journal Entry Thought Process - How To Record Journal Entries
      10:13
    • PDF - 1 Operating Cycle
      00:08
    • Preview03:17
    • Discussion Question 2
      1 question
    • Accounting Comic Break
      00:15
    • Accounting Comic Break
      00:14

    • 3 Merchandising Transactions Overview
      00:51
    • PDF - 20 Merchandising transaction intro
      00:08
    • 20 500 - Merchandising Transaction Explained Purchaser and Se
      05:53
    • PDF - 30 Merchandising Transaction purchase on account
      00:08
    • 30 500 Merchandising Transaction Journal Entry Purchaser
      05:16
    • PDF - 40 Merchandising sale journal entry
      00:08
    • 40 500 Merchandising Transaction Sales Journal Entry - COGS Jou
      07:12
    • Discussion Question 3
      1 question
    • Accounting Comic Break
      00:15

    • 4 Perpetual and Periodic Inventory Systems Overview
      01:22
    • PDF - 5 Periodic Inventory System
      00:08
    • 10 Periodic Inventory System
      22:30
    • Excel Download
      00:05
    • Worksheet Periodic System
      31:34
    • PDF - 10 Perpetual Inventory System
      00:08
    • 5 Perpetual Inventory System
      18:36
    • Excel Download
      00:05
    • Worksheet - Perpetual Inventory System
      35:37
    • PDF - 15 Perpetual vs Periodic
      00:08
    • 15 Perpetual vs. Periodic Inventory System
      16:50
    • Discussion Question 4
      1 question
    • Accounting Comic Break
      00:16

    • 5 Sales Discount %26 Purchase Discount Overview
      01:09
    • PDF - 50 Sales discount vs purchase discount
      00:08
    • 50 500 Sales Discount VS. Purchase Discount
      05:39
    • PDF - 60 Merchandising Transaction purchase on account DIscount
      00:08
    • 60 500 Purchase Discount Journal Entry Explained
      06:35
    • PDF - 70 Sales discount journal entry
      00:08
    • 70 500 Sales Discount Explained Journal Entry Record Discou
      07:18
    • Excel Download
      00:05
    • Worksheet Purchase Discount & Sales Discount
      23:35
    • 10 Multiple Choice Questions Merchandising Company
      10:36
    • Discussion Question 5
      1 question
    • Accounting Comic Break
      00:15

    • 6 Inventory Shrinkage %26 Sales Returns
      00:56
    • PDF - 90 Inventory Shrinkage
      00:08
    • 90 Inventory Shrinkage
      09:06
    • Excel Download
      00:05
    • Worksheet - Inventory Shrinkage
      11:58
    • PDF - 100 Sales Return
      00:08
    • 100 Sales Return & Allowance Transaction
      16:00
    • Excel Download
      00:05
    • Worksheet - Sales Return
      12:51
    • Discussion Question 6
      1 question
    • Accounting Comic Break
      Processing..

    • 7 Financial Statements - Merchandising Company
      01:11
    • Single Step Income Statement Review
      06:56
    • 110 500.20 Merchandising Financial Statements-Accounting instructions
      25:36
    • 20 Multiple Choice Questions Merchandising Company
      18:35
    • Short Calculation 1
      11:04
    • 30 Multiple Choice Questions Merchandising Company
      09:39
    • Discussion Question 7
      1 question
    • Accounting Comic Break
      00:15

    • Excel Download
      00:05
    • 500.10 Merchandising Ex Part 1-Accounting%2C Financial (2)
      15:03
    • 500.20 Merchandising Ex Part 2-Accounting%2C Financial (1)
      15:11
    • 500.30 Merchandising Ex Part 3-Accounting%2C Financial (1)
      15:08
    • 500.40 Merchandising Ex Part 4-Accounting%2C Financial (1)
      14:10
    • Short Calculation 2
      18:23
    • Discussion Question 8
      1 question
    • Accounting Comic Break
      00:15

    • 45 Invoice Definition - What is Invoice%3F
      02:21
    • Cash Discount Definition - What is a Cash Discount%3F
      02:30
    • Credit Memorandum Definition - What is a Credit Memorandum%3F
      02:53
    • Credit Period Definition -What is a Credit Period%3F
      01:39
    • Credit Terms Definition -What are Credit Terms%3F
      02:02
    • FOB Definition%2C Free on Board - FOB Shipping Point - FOB Destination - What is
      02:36
    • Gross Margin Definition - What is Gross Margin%3F
      02:14
    • Gross Margin Ratio Definition
      02:52
    • Gross Profit Definition - What is Gross Profit%3F
      02:18
    • Gross Profit Ratio Definition - What is gross profit ratio
      02:47
    • Inventory Definition
      01:53
    • Merchandise Definition
      02:03
    • Multiple-Step Income Statement Definition - What is a Multiple-Step Income State
      02:43
    • Periodic Inventory System Definition - What is Periodic Inventory System%3F
      04:10
    • Perpetual Inventory System Definition - What is Perpetual Inventory System%3F
      03:17
    • Purchase Discount Definition - What is Purchase Discount%3F
      03:40
    • Sales Discount Definition - What is sales discount%3F
      03:30
    • Shrinkage Definition - What is Shrinkage%3F
      01:34
    • Single-Step Income Statement - What is a Singe-Step Income S
      02:50
    • Trade Discount Definition - What is a Trade Discount
      01:14
    • Wholesaler Definition - What is a Wholesaler%3F
      01:50
    • Accounting Comic Break
      00:15

    Instructor

    Robert (Bob) Steele
    CPA, CGMA, M.S. Tax, CPI
    Robert (Bob) Steele
    • 4.4 Instructor Rating
    • 14,722 Reviews
    • 306,071 Students
    • 91 Courses

    Through working with students from many different schools, Mr. Steele has learned best practices for helping people understand accounting fast. Learning new skills and finding the best way to share knowledge with people who can benefit from it is a passion of his.  

    Mr. Steele has experience working as a practicing Certified Public Accountant (CPA), an accounting and business instructor, and curriculum developer. He has enjoyed putting together quality tools to improve learning and has been teaching, making instructional resources, and building curriculum since 2009. He has been a practicing CPA since 2005. Mr. Steele is a practicing CPA, has a Certified Post-Secondary Instructor (CPI) credential, a Master of Science in taxation from Golden Gate University, a Bachelor’s Degree in Business Economics with an emphasis in accounting from The University of California Santa Barbara, and a Global Management Accounting Designation (CGMA) from The American Institute of CPA (AICPA).  

    Mr. Steele has also authored five books that can be found on Amazon or in audiobook format on Audible. He has developed bestselling courses in accounting topics including financial accounting and QuickBooks accounting software.  

    In addition to working as an accountant, teaching, and developing courses Mr. Steele has helped create an accounting website at accountinginstruction, a YouTube channel called Accounting Instruction, Help, and How Too, and has developed supplemental resources including a Facebook Page, Twitter Page, and Podcasts that can be found on I-tunes, Stitcher, or Soundcloud. Mr. Steele's teaching philosophy is to make content applicable, understandable, and accessible.  

    Adult learners are looking for application when they learn new skills. In other words, learners want to be able to apply skills in the real world to help their lives. Mr. Steele’s formal accounting education, practical work experience, and substantial teaching experience allow him to create a curriculum that combines traditional accounting education with practical knowledge and application. He accomplishes the goals of making accounting useful and applicable by combining theory with real-world software like Excel and QuickBooks.  

    Many courses teach QuickBooks data entry or Excel functions but are not providing the real value learners want. Real value is a result of learning technical skills like applications, in conjunction with specific goals, like accounting goals, including being able to interpret the performance of a business.  

    Mr. Steele makes knowledge understandable by breaking down complex concepts into smaller units with specific objectives and using step by step learning processes to understand each unit. Many accounting textbooks cram way too much information into a course, making it impossible to understand any unit fully. By breaking the content down into digestible chunks, we can move forward much faster.  

    Mr. Steele also makes use of color association in both presentations and Excel worksheets, a learning tool often overlooked in the accounting field, but one that can vastly improve the speed and comprehension of learning accounting concepts.  

    The material is also made understandable through the application of concepts learned. Courses will typically demonstrate the accounting concepts and then provide an Excel worksheet or practice problems to work through the concepts covered. The practice problems will be accompanied by an instructional video to work through the problem in step by step format. Excel worksheets will be preformatted, usually including an answer tab that shows the completed problem, and a practice tab where learners can complete the problem along with a step by step presentation video.  

    Mr. Steele makes learning accounting accessible by making use of technology and partnering with teaching platforms that have a vision of spreading knowledge like Udemy.

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