Describe purchase discounts and allowance

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This week, we will be reviewing Chapter 5 on Merchandising Operations. Companies like Wal-Mart, Target, and Amazon are all examples of companies that purchase inventory from suppliers, and then sell those products to consumers.

Question

 Describe the 2 formats for the income statement of a merchandising company, and list the respective sub-totals found in each income statement format. (You should describe some of the accounts found on each type of income statement).

Question 2). a) Describe purchase discounts and purchase returns & allowances.

b) Describe the 2 shipping terms methods companies use when delivering products, and how freight costs are accounted for.

Question 3). Sales on Account - Many sales are made on account (on credit) instead of with cash or a credit card. Assume that your new company purchases products for resell to customers, and your plan is to sell those products at a profit.

Reference no: EM132452039

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