ACC 3061 Unit 4 Assignment 2 Accounting Knowledge Transfer
1. Describe the major differences between income statements for a service company and a merchandise company.
2. As part of the calculation for cost of goods sold it is necessary to determine the value of goods on hand, termed merchandise inventory. Accountants use two basic methods for determining the amount of merchandise inventory. Identify the two methods and describe the circumstances (including examples of users of each method) under which each method would be used. Describe the computation necessary to arrive at the cost of goods sold figure on a merchandising company's income statement.
3. Contrast an unclassified income statement with the components of a classified income statement.
4. What is gross margin? How is it calculated?