Presentation on Merchandise Inventory system Submitted to Mohammad Sakhawat Hossain, MBA(DIU), ACMA(ICMAB), ACCA(UK)Partly Qualified Assistant Professor E-mail: sakhawat@daffodilvarsity. edu. bd Presented by Riad Tanbhir khan
Definition of Merchandise All movable goods such as cars, textiles, appliances, etc. and 'f. o. b. ' means free on board. n The commodities or goods that are bought and sold in business. n
Related to MERCHANDISE 1. commodities, 2. goods, 3. wares, 4. line;
Related to MERCHANDISE n n n export, import; inventory, staples, stock, stuff, supply; job lot; domestics, durables (also durable goods), hard goods
Merchandising n Merchandising is the methods, practices, and operations used to promote and sustain certain categories of commercial activity.
Merchandising Trading industry n Retail supply chain n licensing n
Trading industry n merchandiser is someone who is continuously involved in business promotion by buying and selling of goods. In Asian countries such as India, this term is more synonymous with activities right from sampling or idea conception to dispatching of the shipment.
Retail supply chain n n all products delivered directly to the store from a manufacturer or wholesaler will be stocked by the manufacturer's/wholesaler's employee who is a full time merchandiser Product categories where this is common are Beverage (all types, alcoholic and non-alcoholic), packaged baked goods (bread and pastries), magazines and books, and health and beauty products.
Licensing n Trademarked brand names, logos, or character images are licensed to manufacturers of products such as toys or clothing, which then make items in or emblazoned with the image of the license, hoping they'll sell better than the same item with no such image
Example n Children Merchandising for children is most prominently seen in connection with films and games, usually those in current release and with television shows oriented towards children n Adult The most common adult-oriented merchandising is that related to professional sports teams (and their players)
What do they do? Research n Produce n Plane n Promote n
At store Mange stock n Create eye catching display n Maximise sales n
Working condition Working hour Panctual n Schedule - flexible - Travel around stores n
Merchandise inventory The current asset which reports the cost of a retailer's, wholesaler's, or distributor's goods purchased to be resold, which have not yet been sold as of the balance sheet date
Merchandise inventory system Perpetual inventory system n Periodic inventory system n
Perpetual inventory system updates inventory accounts after each purchase or sale. n Inventory subsidiary ledger is updated after each transaction. n Inventory quantities are updated continuously n
Periodic inventory system n n Periodic inventory system records inventory purchase or sale in "Purchases" account. "Inventory" account is updated on a periodic basis, at the end of each accounting period (e. g. , monthly, quarterly). Inventory subsidiary ledger is not updated after each purchase or sale of inventory Inventory quantities are not updated continuously
Comparison of entries-perpetual vs periodic (Purchase) Date Transaction Merchandise inventory Accounts payable 3800 Merchandise inventory cash 150 Purchase returns Accounts payable Merchandise inventory & Allowances 300 May 4 Purchase of merchandise on credit 6 8 14 Perpetual Inventory Dr system Freight costs on purchase Payment on Account with a discount Accounts payable Cash Merchandise inventory Cr Periodic Inventory System Dr 3800 Purchases Accounts payable 150 Freight in Cash 300 Accounts payable Purchase returns 3500 3430 70 Accounts payable Cash Purchase Discounts 3500 Cr 3800 150 300 3430 70
Comparison of entries-perpetual vs periodic (Sales) Date Transaction Perpetual Inventory system May 4 Account Receivable Sale of merchandise Sales revenue on credit Cost of goods sold Merchandise inventory Sales return & Allowance Return of merchandise Account Receivable sold 8 Merchandise inventory Cost of goods sold 1 4 Cash received on account with a discount Cash Sales Discounts Account Receivable Dr Cr 3800 2400 Periodic Inventory System Dr Account Receivable Sales revenue 3800 300 140 No entry 140 3430 70 3500 3800 No entry Sales return & Allowance Account Receivable 300 Cr Cash Sales Discounts Accounts Receivable 300 3430 70 3500
Perpetual systems maintain a running record to show the inventory on hand at all times. n Periodic systems do not keep a continuous record of inventory on hand. n