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Q. Advantage of a pre-inventory sale?
Have you still taken advantage of a pre-inventory sale at your favourite retail store Many stores offer bargain prices to decrease the merchandise on hand and to minimize the time and expense of taking the inventory. A smaller inventory as well enhances the probability of taking an accurate inventory since the store has less merchandise to count. From section 6 you know that companies use inventory amounts to determine the cost of goods sold this main expense affects a merchandising company's net income. In this section you learn how important inventories are in preparing a correct statement of retained earnings, income statement and balance sheet.
The fundamental concepts, discussed in the previous paragraphs, are the core components in the theory of accounting. Such concepts as postulates or conventions, although, permit a
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Cash $10,000 Accounts Payable $7,000 Accounts Receivable $6,400 Mortgage Payable $65,000 Supplies $1,500 Long-term Debt $36,000 Building $150,000 Notes Payable $9,000 Equip
Ledger is said to be the principal book entry and the transactions can even be directly entered into the ledger account.” Elaborate and explain why journal is necessary.
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