Accounting Grade 11

Accounting Grade 11

Which among the following provide a service business and merchandising business?Explain why?

movies, gasoline, soft drinks, car wash, CDs, concert, jeans, haircuts, sports events, car

Chapter 14.1

Accounting for a Merchandizing Business, Pages 383-386

Objectives

• Interpret the difference between a service business and a merchandising business.

• Judging the difference between the operating cycle and the accounting cycle.

• Assess the accounts of a merchandising business

Introduction

A service business is one that provides a service to the public for a fee. In contrast a merchandising business buys goods (such as computers, clothing, and furniture) and then sells those goods to customers for a profit

Open Ended

Activity 1

1.What is the meaning of service and merchandising business?

2.What is the difference between service and merchandising?

Multiple Choice

A ___________________ business is one that provides a service to the public for a fee

• Retailer

• Merchandise

• Service

• Wholesaler

Multiple Choice

A ___________business buys goods (such as computers, clothing, and furniture) and then sells those goods to customers for a profit.

• Wholesaler

• Service

• Merchandising

• Retailer

Open Ended

Why do consumers buy from retailers rather from wholesalers?

Video

https://www.youtube.com/wat

Open Ended

Activity 2:

1.What is the meaning of an operating system?

2.How do the operating system and the accounting system differ from each other?

Open Ended

Use Figure 14-1 to associate the operating cycle of a merchandising business with the accounting cycle. How are the two similar?

Information

A merchandising business buys goods from a wholesaler or a manufacturing business and then sells these goods to its customers. Goods bought for resale are called merchandise. The items of merchandise the business has in stock are referred to as inventory.

Open Ended

Activity 3

1. The inventory of a business is represented in the general ledger by the __________ account Merchandise Inventory

2.Mention the debit and credit rule for the merchandise inventory account.

3.What is Sales Account?Mention the classification and debit and credit rule.

4.What are the challenges faced by a company which has large amount of sales?

Draw the T account in your notebook for the following accounts.

1. Merchandise Inventory

2.Sales Account

Open Ended

What does the balance of the Merchandise Inventory account show? What does the balance of the Sales account show?

Open Ended

Plenary

Write the important terms of the lesson.