In this course, the accounting for inventory in merchandising companies is presented.  Both the purchase and sales sides of the transactions will be analyzed, along with sales tax and physical inventory practices.  Differences in accounting for both Free On Board (FOB) points will be explained along with dealing with payment discounts. 

The Income Statement is expanded to a Multi-Step Income Statement to accommodate the additional information needed to be presented by a merchandising company.  Additionally, contra-accounts are added to the list of accounting tools.

Course Series

This course is included in the following series:

11 CoursesBack to the Basics: Accounting Fundamentals

  1. Accounting Review: The Basics of Debits and Credits
  2. Transaction Analysis, T-Accounts, Debits and Credits, and Trial Balances
  3. Accounting Review: Overview of Financial Statements; P&L, Balance Sheet, and Cash Flow
  4. The Accounting Equation and Financial Statements
  5. Bank Reconciliations, Cash, and Internal Controls
  6. Accounts Receivable Training: Bad Debts
  7. Equipment and Depreciation
  8. Inventory Costing
  9. Purchase and Sale of Inventory
  10. The Adjusting Process
  11. The Closing Process
Learning Objectives
  • Discover core concepts related to inventory for a merchandising business
  • Recognize how to perform transactions for the sales of inventory cycle
  • Recognize how to perform transactions for the purchase of inventory cycle
  • Recognize how to perform other transactions associated with inventory such as sales tax and physical inventory counts
Last updated/reviewed: August 6, 2023
52 Reviews (158 ratings)

Reviews

4
Anonymous Author
This is a good course going over the basic transactions of buying and selling inventory. Time could have saved if the journal entries were pre-arranged instead of hand written during the course. That time could have been used in other various accounting issues surrounding inventory that are more than basic.

Anonymous Author
Course was quite detailed and gave alot of sample problems to work through. However I did not like the fact that we do not get to see which answers were incorrect on the exam and why? It would be nice to know where we went wrong!

5
Anonymous Author
This was a nice overview of Inventory and the different methods used to calculate COGS. The instructor used several different examples to show the different points of view between the Buyer and seller.

4
Anonymous Author
good course overview of sales/inventory, may be a bit tough if you have never had any experience with sales/inventory. I wouldn't consider this a beginners course. But it is a good one.

5
Anonymous Author
Professor Slayter - You are a great teacher! You explained the multi-step income statement very well, the differentiation between FOB - shipping point versus destination.

5
Anonymous Author
Good coverage with lots of buyer - seller parallel examples. Workbook very helpful. Missing answers for pages 10-16. Excellent refresher. Highly recommend this course.

5
Anonymous Author
A great review of merchandise company income statement and Inventory accounting. The journal entries were clear and concise and helpful to understand the concepts.

5
Anonymous Author
I thought this course was very interesting and helpful. I thought the instructor explained the topic very well. I would recommend this course to others.

5
Anonymous Author
very thorough presentation and a great deal of information. Although I like the interactive presentation I would prefer slides to use as a reference.

4
Anonymous Author
Good overview of recording inventory relative to buyer/seller perspective. Wish that they would have touched on dead stock or obsolete inventory.

5
Member's Profile
Tthe course requirements have been achieved. What I like the most about the instructore is his course covers both theory and practical questions.

5
Member's Profile
Another good course, enjoyed the instructor. Goes over in depth the inventory for different types of business. Basic level information.

4
Anonymous Author
This was a well explained course and easy to follow along. I was a little disappointed in the visual aids, not very professional.

5
Anonymous Author
I haven't touched inventory since I was in college. This actually made me think. The examples were comprehensive and helpful.

5
Anonymous Author
This was another fun class to take. It is a very well-organized session with clear explanations and many examples to practice.

4
Anonymous Author
This is a great course for those new to accounting concepts, or for those who have forgotten what they learned in college.

4
Member's Profile
The course was good teaching the basics and discussion many examples. The instructor was easy to follow and engaging.

5
Member's Profile
Good refresher on FOB shipping point and FOB destination, as well as discount period application on sales invoices.

5
Anonymous Author
Great course! Good for getting a better understanding of sales/shipping terms and how it impacts the financials.

5
Member's Profile
I really enjoyed course. I would like to be able to see the correct answer for exam questions wrong.

4
Member's Profile
Course was fairly comprehensive concerning the topic. The presentation method was pretty effective.

3
Anonymous Author
Good overview

5
Member's Profile
Erik nice class. FOB this FOB that now I finally understand. Thanks for the lesson. Larry

4
Anonymous Author
This is a good over in inventory costing, I have not done this type of accounting since college.

5
Anonymous Author
Good to remind basic principle. quite useful and be applied for beginner of trading accountant.

4
Member's Profile
Good coverage of material. Handouts were not as useful as they are in most other courses.

4
Member's Profile
This was a good course to review the basics of purchases and sale of inventory.

4
Anonymous Author
Showing buyer vs. seller perspective assisted in making this topic very clear.

Member's Profile
A good basic course. The instructor does a good job of illustrating entries.

4
Anonymous Author
The last question did not seem to be worded as well as it could have been.

5
Member's Profile
I like how the visuals were done - not just reading but more interactive.

4
Anonymous Author
Clear walkthrough of accounting areas pertaining to sales of inventory

4
Anonymous Author
I thought I would learn more comprehensive but it was basic concepts

4
Anonymous Author
lol. I am a CPA. not sure what I was doing here. otherwise very good

5
Anonymous Author
Overall a good repetition of material. Exam is a bit confusing thou.

5
Member's Profile
Please check the answer to the last question in the final exam.

5
Member's Profile
Very clear and understandable explanation of inventory basics.

5
Anonymous Author
this was a good course on the purchase and sale of inventory.

3
Anonymous Author
purchase and sale inventory is a good overview course for all

5
Anonymous Author
Good course on the basics of inventory accounting.

4
Anonymous Author
Good simple and quick review of the sales process.

5
Member's Profile
Nice refresher for beginners in accounting

5
Member's Profile
Very nice introductory review. Thanks!

3
Anonymous Author
Very basic course. No slides included.

3
Anonymous Author
Too much time spent on discounts.

5
Member's Profile
Clearly presented review.

5
Anonymous Author
Good refresher

5
Anonymous Author
Good overview.

4
Member's Profile
Veey Good

5
Member's Profile
Excellent

4
Member's Profile
Swell

4
Member's Profile
good

Prerequisites
Course Complexity: Foundational

No Advanced Preparation or Prerequisites are needed for this course. However, it is recommended to take the other courses in the series prior to completing this one.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to Purchase and Sale of Inventory11:28
Purchase and Sale of Inventory
  Multi Step Income Statement 14:11
  FOB and Payment Terms 4:21
  Journal Entries and Buyers Point of View16:11
  Sellers Point of View8:46
  Example: Purchase and Sale of Inventory11:28
CONCLUSION
  Sales Tax and Inventory Shrinkage 8:08
Continuous Play
  Core Financial Accounting: Purchase and Sale of Inventory1:14:32
SUPPORTING MATERIALS
  Notes Template: Purchase and Sale of InventoryPDF
  Workbook: Purchase and Sale of InventoryPDF
REVIEW & TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam