COURSE OBJECTIVE: This is a non-computerized course which continues from Accounting Fundamentals Level I. Students will learn how to account for a merchandising company using the Cost of Goods Sold account, the sale of inventory under the perpetual and periodic inventory systems, ratios to evaluate a business and closing the accounts of a merchandising company. Inventory costing methods such as FIFO, specific unit cost and moving-weighted average, accounting ethics, methods of writing off bad debts, methods of amortizing fixed assets and generally accepted accounting principles (GAAP) will also be covered.
PREREQUISITES: Bookkeeping & Accounting Fundamentals Level I
COURSE COMPLETION: Students final mark for this course will be based on 80% in-class assignments and 20% in-class quiz.
MATERIALS REQUIRED: Calculator, pencil, eraser and Textbook: The latest Canadian edition of Horngren's Accounting Volume One.
TOPICS
Session 1 – Chapter 5 - Accounting for a Merchandising Business
Perpetual Inventory:
- Selling Inventory and Recording Cost of Goods Sold
- Accounting for the purchase and sale of inventory under perpetual inventory
Session 2 – Chapter 5 - Accounting for a Merchandising Business
- Continue accounting for the purchase and sale of inventory under perpetual inventory
Session 3 – Chapter 5 – Accounting for a Merchandising Business
- Continue accounting for the purchase and sale of inventory under perpetual inventory
Session 4 – Chapter 5 - Accounting for a Merchandising Business
- Use sales and gross margin to evaluate a company
- Prepare a merchandiser’s financial statements under the perpetual inventory system
- Use the gross margin percentage and the inventory turnover ratios to evaluate a business
Session 5 – Chapter 5 - Accounting for a Merchandising Business
Periodic Inventory System:
- Account for the purchase and sale of inventory under the periodic inventory system
- Compute the cost of goods sold under the periodic inventory system
- Adjust and close the accounts of the merchandising business under the periodic inventory system
- Prepare a merchandiser’s financial statements under the periodic inventory system
Session 6 – Chapter 6 - Inventory Costing Systems
- Specific-Unit Cost
- FIFO
- Weighted Moving Average
- Lower of Cost and net realizable value
Session 7 – Chapter 9 - Accounting for Bad Debts
- Estimating Uncollectables
- Percent-of-sales method
- Aging-of accounts-receivable method
- Percent-of accounts-receivable method
- Direct Write-Off method
- Recovery of an account previously written off
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Session 8 – Chapter 10 - Property Plant and Equipment; Goodwill; Intangible Assets
- Account for amortization
- Amortization for income tax purposes – Capital Cost Allowance
- Partial year amortization
Session 9
- Disposal of Property, Plant and Equipment
- Account for natural resources
- Account for Goodwill and intangible assets
Session 10
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