Accounting
A firm which buying and reselling products is calls merchandise. This is also a way for the merchandising business to earn their profit. Merchandising businesses are different from service businesses. Merchandising businesses have goods on hand and resell to customers, it is called inventory (Wise, Anderson, Caldwell 1998:180). However, inventories are recorded day to day under periodic or perpetual methods. Further, very businesses transactions involved the Goods and Service Tax. This essay is set out to explore the operation of merchandising business, the two methods which use to record inventory transactions and the application of Goods and Service Tax. In most merchandising businesses stock on hand, which is also called inventory, stock in trade or simply stock, is a very important asset. Thus, it is necessary to keep the inventory safe from damage, deterioration and theft. This requires the building of storage areas and the employment of personnel expert in handling inventories (Clift, Roberts 1990:286). Moreover, a retailer must keep substantial stocks because customers, after selecting specific items from a range of alternatives, want the goods immediately, not next week after they have been ordered from the manufact
Finally, the Goods and services tax must be applied to all inventories in order to pay for the government. The business also pays GST on goods and services it purchases from its suppliers. If the GST paid is greater than the GST collected, the taxation authority refunds the amount to the business (Kimmel 2003:189). Such a record helps management to control inventory and prepare interim financial statements. Thus, merchandising firms need to closely account for inventory in their day to day operations. Therefore, the perpetual inventory system is more famous in most of the business, especially for the business which sell high value inventory. It is also important that Cost of goods sold must be updated in order to calculate gross profit. Perpetual and periodic methods are the two methods to record the inventory transactions. Therefore, an accurate record of inventory is important to ensure that there is enough stock for sell. It is necessary to keep an accurate inventory record in order to produce the Cost of goods sold and Gross profit. Physical inventory counts are usually taken at least once a year to check the accuracy of inventory records. GST is collected by a business from its customers when goods or services are sold or performed. Thus, any missing inventory or shortages will be disclosed. With this information, a cumulative cost of goods sold can be calculated. Many small retail businesses find that the computerized inventory record system is useful.
Common topics in this essay:
Loftus Mladenovic,
Australian Federal,
Clift Roberts,
Service Tax,
,
Tax GST,
Anderson Caldwell,
cost sold,
record inventory,
gross profit,
inventory record,
called inventory,
et al,
inventory system,
missing items,
merchandising businesses,
methods record,
methods record inventory,
record inventory transactions,
accurate inventory record,
perpetual inventory system,
finally services tax,
|
Acceptance Essays
