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| Learning Objectives are classified as conceptual, analytical, or procedural.
After completing this chapter you should be able to: Conceptual C1 Describe merchandising activities and identify income components for a merchandising company. C2 Identify and explain the inventory asset and cost flows of a merchandising company. Analytical A1 Compute the acid-test ratio and explain its use to assess liquidity. A2 Compute the gross margin ratio and explain its use to assess profitability. Procedural P1 Analyze and record transactions for merchandise purchases using a perpetual system. P2 Analyze and record transactions for merchandise sales using a perpetual system. P3 Prepare adjustments and close accounts for a merchandising company. P4 Define and prepare financial statements for a merchandising company. P5 Appendix 5A—Record and compare merchandising transactions using both periodic and perpetual inventory systems. |