How a shop records buying goods, selling them, and reporting the profit it makes on those sales.
35
Games
7
Things you can do
What you will be able to do
By the end of this chapter
Tell the difference between a business that buys and resells goods and one that sells a service, and explain why only the first one has a cost of goods sold.
Record a purchase of goods for resale, including the shipping cost paid by the buyer, goods sent back to the supplier, and a discount for paying early.
Read the delivery terms on an invoice and say who owns the goods while they are travelling and who pays the shipping.
Record every sale in two steps: the money earned from the customer, and the cost of the goods that left the shelf.
Handle customer returns, price reductions given to customers, and discounts for customers who pay early.
Build a multi-step income statement that shows net sales, gross profit, operating income, and net income in the right order.
Work out the gross profit margin and the profit margin, and say what it means when either one goes up or down.
Every game in this chapter
All 35 games
Every game in this chapter is finished, tested on real phones, and ready to play.
01
Icon Memory Match
Built and working. Being checked by hand.
02
Operating Cycle Diagram-Builder
Built and working. Being checked by hand.
03
Buyer/Seller Mirror Sort
Built and working. Being checked by hand.
05
Multi-Step IS Ladder Labeller
Built and working. Being checked by hand.
06
Pop the Right Term
Built and working. Being checked by hand.
08
Inventory or Op Expense? Slice
Built and working. Being checked by hand.
09
Flow of Goods — Perpetual Cycle Tutorial
Built and working. Being checked by hand.
10
Read the Purchase Invoice
Built and working. Being checked by hand.
12
Build the Basic Purchase Entry
Built and working. Being checked by hand.
14
Why Perpetual Credits Inventory (not a Contra)
Built and working. Being checked by hand.
15
The 2/10 n/30 Discount Window
Built and working. Being checked by hand.
16
Purchase Return — Read the Debit Memo
Built and working. Being checked by hand.
17
Watch the Net Purchases Bar Shrink
Built and working. Being checked by hand.
19
Every Sale = TWO Entries
Built and working. Being checked by hand.
20
Read the Sales Invoice
Built and working. Being checked by hand.
21
Two-Entry Sale — Build from the Invoice
Built and working. Being checked by hand.
22
Sales Return vs Allowance — Side-by-Side
Built and working. Being checked by hand.
23
The Sales Discount Window
Built and working. Being checked by hand.
24
Contra-R is Debit-Normal (the carve-out concept)
Built and working. Being checked by hand.
25
Slice the Contra-Revenues
Built and working. Being checked by hand.
27
Net Sales Waterfall
Built and working. Being checked by hand.
28
The Multi-Step Ladder — Watch It Build
Built and working. Being checked by hand.
30
Stack the Income Statement
31
Build the Multi-Step IS
Built and working. Being checked by hand.
36
Fix the Merchandising Income Statement
Built and working. Being checked by hand.
37
Concept Racer — Chapter 5 Review
Built and working. Being checked by hand.
38
Harveldon and Oswynder Full Cycle
Built and working. Being checked by hand.
39
Chapter 5 Mastery Quiz
Built and working. Being checked by hand.
40
Discount-After-Return Waterfall
Built and working. Being checked by hand.
41
Invoice to Inventory
Built and working. Being checked by hand.
42
Freight-In Capture
Built and working. Being checked by hand.
43
FOB & Freight — Whose Cost, Which Account?
Built and working. Being checked by hand.
44
Income from Operations — The Fourth Subtotal
Built and working. Being checked by hand.
45
Gross Profit Margin & Profit Margin
Built and working. Being checked by hand.
46
Gross vs Net — Two Ways to Record the Discount
Built and working. Being checked by hand.
Optional extra module
Special Journals & Subsidiary Ledgers
An optional module on the bookkeeping system a school accounting course teaches: special journals, subsidiary ledgers, and the periodic inventory method. A separate set of 6 games you can include or leave out. It is not one of the fifteen core chapters, and nothing in them changes — Chapters 5 and 6 still teach the perpetual method, and neither method is “wrong”.
Tell a general ledger account from a subsidiary ledger account, and name the two subsidiary ledgers: one for vendors (accounts payable) and one for customers (accounts receivable).
Say what a special journal is for - a journal that records only one kind of transaction — and choose between the sales, purchases, cash receipts, cash payments and general journals.
Record a transaction in the right journal and the right column, telling a special amount column from a general amount column.
Prove a subsidiary ledger against its controlling account: prepare a schedule of accounts payable or accounts receivable, check the total, and say what it means when the two disagree.
Use the periodic method and tell it apart from the perpetual method — record a purchase to Purchases rather than to Inventory, name the periodic accounts, and work out Cost of Merchandise Sold as beginning inventory plus net purchases minus ending inventory.
Want to see more, use these with your own students, or tell us something is wrong? Write to us.
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