Questions are for any carpentry business accounting help!

1. You are now going to add a merchandising component to your business. What related products could you sell?

I think that we could say some clothing merch. Sell sweatshirts and hats.

2. Give a specific example of how you would calculate your gross profit margin after a month of business. Explain what each number means.

3. What type of credit terms would you offer? What kind of terms would you like your vendors to have?

4. Give a specific example of why you would use a Sales Returns and Allowances account.

5. Assume you have a large amount of inventory. How does this affect your acid test and current ratio? What problems are associated with a large amount of inventory?

6. Suppose your business has a 35% gross margin ratio. How can this be interpreted? Think of how you would explain this to someone who has never taken an accounting class.

7. Explain a situation why inventory shrinkage might happen. Be specific to your business. How would it be handled in your accounting books?

8. As a business owner, what kind of shipping terms would you offer? Why? How would that be handled in your accounting books?

9. Now that you are also selling merchandise, how does this affect your closing process to prepare for the next fiscal period?

thank you