1. Accounting for Sales and Cash Receipts
Chapter 14 $
Accounting for Sales and Cash Receipts $
Making Accounting Relevant
Sales of products or services generate revenue for a business. $
If you work at a retail business, what sales transaction have you participated in? Discuss the actions involved in the sale. $

2. $ $ $ $ Section 1 Accounting for a Merchandising Business
Chapter 14 $
Section 1 Accounting for a Merchandising Business $
What You’ll Learn
The purpose of a merchandising business.
The difference between a retailer and a wholesaler.
Uses of the Merchandise Inventory account, and its rules of debit and credit.
Uses of the Sales account, and its rules of debit and credit. $ $

3. $ $ $ $ Why It’s Important Key Terms Chapter 14 retailer wholesaler
Section 1 Accounting for a Merchandising Business (cont'd.)
Chapter 14 $
Why It’s Important
As consumers, we buy goods from merchandising businesses daily. You need to understand the nature of these transactions to maintain accounting records for a merchandising business. $ $
Key Terms
retailer
wholesaler
merchandise $
inventory
sales

4. $ $ $ $ The Operating Cycle of a Merchandising Business Chapter 14
Section 1 Accounting for a Merchandising Business (cont'd.)
Chapter 14 $
The Operating Cycle of a Merchandising Business $ $ $

5. Merchandise Inventory
Section 1 Accounting for a Merchandising Business (cont'd.)
Chapter 14 $
Merchandise Inventory Account
Goods bought for resale are called merchandise. The items of merchandise the business has in stock are referred to as inventory. The inventory is represented in the general ledger by the asset account Merchandise Inventory. $ $
Merchandise Inventory $
Debit +
Increase Side
Normal Balance
Credit –
Decrease Side

6. $ $ $ $ Sales Account Chapter 14
Section 1 Accounting for a Merchandising Business (cont'd.)
Chapter 14 $
Sales Account
When a retail merchandising business sells goods to a customer, the amount of the merchandise sold is recorded in the Sales account. $ $
Sales $
Debit –
Decrease Side
Credit +
Increase Side
Normal Balance

7. $ $ $ $ Check Your Understanding Chapter 14
Section 1 Accounting for a Merchandising Business (cont'd.)
Chapter 14 $
Check Your Understanding $
What type of account is Merchandise Inventory? $ $