The transactions that we have encountered in the first few weeks tutorials and lectures have been limited to those of a service business.
Service businesses earn their revenue by charging a fee for providing services to their clients.
They do not normally sell physical goods to their clients. Because there are no physical goods to account for, accounting for the operations of service firms is relatively simple. In this lecture we will introduce accounting for retail and wholesale operations. Grace Brothers, Coles, Clints Crazy Bargains and Club X are all examples of retail outlets. Goods that have been purchased with the intent of on-selling, but have yet to be sold are called Inventories.