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Merchandising Operations, Income Statements, and Inventory Cost-Flow Assumptions
In this area, we will discuss the accounting-for-inventory transactions of merchandising companies, the two formats of preparing the income statement, and how to evaluate the profitability of a merchandising company. We will also discuss how companies determine the year-end inventory value and cost of goods sold using one of the cost-flow assumptions. Finally, we will examine the impact of choosing a certain cost-flow assumption on the tax liability and other financial statement numbers of a company.
Question 1.
How is the income statement of a merchandising company different from that of a service company?
Question 2.
What is the difference between a service-oriented company and a merchandising company?
Notes:
1. Include in your post that you attended the live lecture
2. provide a summary of your key takeaways from the lecture
Book for references
Financial Accounting: Tools for Business Decision Making 9thKimmel, Weygandt and Kieso
2019 Wiley
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