Introduction- Meaning – Definition- Operating cycles – Flow of costs – Perpetual and periodic inventory systems- Advantages of perpetual system- Difference between service enterprise and merchandising company - Simple problems.

Freight cost – Purchase returns and allowances – Purchase discounts – Summary of purchasing transactions- Simple problems.

Sales - Sales returns and allowances- Sales discounts- Simple problems

Adjusting entries – Closing entries – Summary of merchandising entries- Simple problems.

Meaning of income statement - Multiple – step income statement – Single –step income statement – Classified balance sheet – Simple problems