ACCOUNTING SYSTEMS FOR MERCHANDISE REGISTRATION
DEFINITION
Accounting system used to record the quantities
of existing merchandise and also to establish the
cost of merchandise sold in monetary terms.
GLOBAL OR GENERAL MERCHANDISE
METHOD
ADVANTAGES
• It allows to have a complete and
detailed vision of all the financial
transactions of the entity, which
facilitates the monitoring and control
of all financial activities.
• By recording all transactions in a
general ledger, the chance of
skipping or duplicating transactions is
reduced, ensuring financial
statement accuracy.
• It allows consolidating financial
information from different areas or
divisions of the entity in one place,
which facilitates analysis and
decision-making at the organizational
level.
WHAT IS IT FOR?
They are critical to maintaining proper inventory control, calculating cost of goods sold, valuing inventory, and
providing accurate and relevant financial information. They help companies make informed decisions and comply with
legal and tax requirements.
MOST COMMON ACCOUNTING SYSTEMS
It involves keeping a complete and detailed record of all financial transactions of an entity, from start to finish. All transactions
are recorded in a general ledger, which is a centralized record that shows the financial status of the entity. The global record
provides a comprehensive and accurate view of transactions and their impact on the entity's finances.
DISADVANTAGES ACCOUNTS THAT USE:
Inventories
Debit: Credit:
At the start of the period
For the initial inventory value of the merchandise
Purchases
Debit: Credit:
For purchases at cost price of merchandise made with cash or credit.
• It requires a strong accounting
Purchase expense
system and trained personnel to
Debit: Credit:
maintain and update the register
for the expenses of purchasing the merchandise
properly.
Returns on purchases
• It can consume significant time and Debit: credit
resources, especially in larger For discounts on the purchase of merchandise at cost price
organizations with frequent and Discounts on purchases
voluminous financial transactions. Debit: Credit:
• Although the global method For discounts on the purchase of merchandise at cost price
provides an overview of financial Sales
transactions, it may be less suitable Debit: Credit:
for detailed analysis. For credit or cash sales of merchandise at sale price
Returns on sales
Credit: Debit:
For sales returns of merchandise at sales price
Purchases
Credit: Debit:
For sales discounts on merchandise at sales price
 ACCOUNTING SYSTEMS FOR MERCHANDISE REGISTRATION
MOST COMMON ACCOUNTING SYSTEMS
It involves breaking down transactions into specific categories for detailed analysis. For example, sales may be
recorded separately based on product or geographic area. The analytical record helps to better understand the
Analytical or detailed method different aspects of the business and makes it easier to analyze costs, track income and expenses, and make
strategic decisions.
ADVANTAGE DISADVANTAGES ACCOUNT THAT USE:
Invetories
Debit: Credit:
At the start of the period
• It allows transactions to be broken
For the value of the initial inventory of merchandise
down into specific categories, which
• It may require the creation and Purchases
facilitates a more detailed analysis of
maintenance of additional accounts Debit: Credit:
financial operations. For purchases at cost price of merchandise made in cash or on
for each specific category of analysis.
• By using specific analytical accounts credit.
This can increase the complexity of
for expenses, the analytical method Purchase expense
the accounting system and require
allows for more accurate tracking of Debit: Credit:
more effort to classify and record
the costs associated with each For the expenses of purchasing the merchandise.
transactions.
category or area. This is especially Returns on purchases
• Detailed analysis means more time
useful for identifying areas of Debit: Credit:
and resources dedicated to tracking For discounts on the purchase of merchandise at cost price.
overspending or inefficiencies and
and recording transactions in Discounts on purchases
taking corrective action.
specific categories. This can increase
• By having specific analytical Debit: Credit:
the administrative workload and For discounts on the purchase of merchandise at cost price.
categories, the analytical method
require trained personnel to carry Sales
facilitates greater internal control by
out this task effectively. Debit: Credit:
providing greater visibility on the
• In some cases, the level of detail For credit or cash sales of merchandise at sale price.
entity's income and expenses. This
provided by the analytical method Returns on sales.
helps to identify potential errors or
may be excessive or unnecessary. Debit: Credit:
irregularities and take steps to For sales returns of merchandise at sales price.
correct them. Purchases
Debit: Credit:
For sales discounts on merchandise at sale price.
 ACCOUNTING SYSTEMS FOR MERCHANDISE REGISTRATION
MOST COMMON ACCOUNTING SYSTEMS
It involves breaking down transactions into specific categories for detailed analysis. For example, sales may be
recorded separately based on product or geographic area. The analytical record helps to better understand the
Analytical or detailed method different aspects of the business and makes it easier to analyze costs, track income and expenses, and make
strategic decisions.
ADVANTAGE DISADVANTAGES ACCOUNT THAT USE:
Invetories
Debit: Credit:
At the start of the period
• It allows transactions to be broken
For the value of the initial inventory of merchandise
down into specific categories, which
• It may require the creation and Purchases
facilitates a more detailed analysis of
maintenance of additional accounts Debit: Credit:
financial operations. For purchases at cost price of merchandise made in cash or on
for each specific category of analysis.
• By using specific analytical accounts credit.
This can increase the complexity of
for expenses, the analytical method Purchase expense
the accounting system and require
allows for more accurate tracking of Debit: Credit:
more effort to classify and record
the costs associated with each For the expenses of purchasing the merchandise.
transactions.
category or area. This is especially Returns on purchases
• Detailed analysis means more time
useful for identifying areas of Debit: Credit:
and resources dedicated to tracking For discounts on the purchase of merchandise at cost price.
overspending or inefficiencies and
and recording transactions in Discounts on purchases
taking corrective action.
specific categories. This can increase
• By having specific analytical Debit: Credit:
the administrative workload and For discounts on the purchase of merchandise at cost price.
categories, the analytical method
require trained personnel to carry Sales
facilitates greater internal control by
out this task effectively. Debit: Credit:
providing greater visibility on the
• In some cases, the level of detail For credit or cash sales of merchandise at sale price.
entity's income and expenses. This
provided by the analytical method Returns on sales.
helps to identify potential errors or
may be excessive or unnecessary. Debit: Credit:
irregularities and take steps to For sales returns of merchandise at sales price.
correct them. Purchases
Debit: Credit:
For sales discounts on merchandise at sale price.