BUYING AND

SELLING
● COST, EXPENSES, AND REVENUES
● DETERMINING COGS, NET SALES, GROSS PROFIT,
AND NET PROFIT/LOSS
BELLWORK

Answer the following questions. I will call random

student/s to explain after the attendance.
1. If you have a business, what are you going to sell?
Why?
2. What are the factors to consider in selling your
product?
COST

COST is the amount of money sacrificed to pay for

services, or buy merchandise, raw materials, pay
laborers, and overheads associated in conducting
business.
COST is the actual price or original price of the product
bought from the manufacturer
COST
COST
COST
COST
FORMULAS:

COST OF GOODS SOLD- The actual price of sold products/units/items.

COST
Inventory is the complete list of items that a business holds
for the purpose of selling.

Ending Inventory- unsold item/merchandise and is not

included in the cost of goods sold.

Any inventory left from the previous period/year is forwarded

to the succeeding year as Beginning Inventory
COST
SAMPLE PROBLEMS:
COST
EXPENSES
Expenses are the amount of cash sacrificed other than those mentioned in
the cost such as administrative expenses or selling expenses.

SELLING EXPENSES are those incurred in storing, advertising, packaging,

delivery of goods to the customers, sales salaries, commission expense, and
depreciation expense in furniture, machine, and equipment in the sales office.

ADMINISTRATIVE EXPENSES are expenses needed in the general

administration of the office such as uncollectible accounts expense (unpaid
credit sales), office supplies expense, office salaries expense, utilities
expense, and depreciation for furniture, machine, and equipment in the
administrative office.
EXPENSES
These selling expenses and administrative expenses are
collectively called OPERATING EXPENSES

● Operating expenses are incurred in the regular operations

of business and include rent, equipment, inventory costs,
marketing, payroll, insurance, and funds allocated for
research and development.
● Operating expenses are necessary and mandatory for
most businesses.
REVENUES
Revenues or Gross Sales represent the inflow of cash or other assets from clients and
customers for services rendered or for goods sold.

Profit - a financial gain, especially the difference between the amount earned
and the amount spent in buying, operating or producing something. (Positive
value)
Loss - is incurred when the cost of goods sold is greater than the net sales.
- - amount of money lost by a business or organization.
(Negative value)
Formula: Profit/Loss = Selling Price - Cost
Cost- The cost price is the original price of the merchandise paid by the retailer.
Selling Price - it is the market value or the price at which a good or service is
sold by the seller to the buyer.
REVENUES
Gross Sales - refer to the total sales or total amount of goods or services
sold without deductions yet.

Net Sales - the amount of sales after deducting sales returns, allowances
and discounts.

Gross Profit - amount left from the net sales after deducting the cost of
goods sold.

Net Profit/Loss - amount left after subtracting all the operating expenses
from the gross profit.
REVENUES
DETERMINING THE NET SALES
REVENUES
REVENUES
DETERMINING THE GROSS PROFIT
REVENUES
DETERMINING THE NET PROFIT/LOSS
LET’S PRACTICE Answer the question below and I will call random student
to explain after the attendance. Please see chat box for the link to this
presentation.