Merchandising Operations\" Please respond to the following: Use the Internet to
ID: 2417195 • Letter: M
Question
Merchandising Operations" Please respond to the following:
Use the Internet to research the annual report for at least two (2) merchandising companies. Identify the method that is used to track inventory. Next, watch A. Mursau’s video:
https://www.youtube.com/watch?v=s9DQ7aAi-hs
Identify the inventory tracking method that is used to record the cost of goods sold and ending inventory. Suggest the key risks inherent in recording inventory in using both methods. Provide a rationale for your response.
Explanation / Answer
I took example of walmart and they are using perpetual inventory sytem and in that they use LIFO(Last in first out) method
The youube shows the difference between periodic and perpetual inventory management system.
1)Inventory Account and Cost of Goods Sold Account:These account are updated continously in perpetual and in periodic they will updated at end of period
2)Purchases Account and Purchase Returns and Allowances Account:These are used only in periodic system and updated continously . In perpetual purchase are debited directly to inventory account and returns credited
3)Sales transaction: In perpetual system two entry are made , one for record sale value of inventory and other for COst of goods sold. In periodic only one entry is made
4)Closing entry: These required only om peiodic to update inventory and Cost of goods sold. perpetual does not require closing entry for inventory account