The Sale of Merchandise is a type of transaction existing in accounting that is based on the departure or delivery by a particular company of goods or services typical of the activity it carries out and at a defined price.
As the definition of Merchandise itself indicates, these products or goods were acquired by the company with the purpose of using them in sales transactions and, therefore, integrating them into their activity or work. Through the sale of merchandise, the company develops its business and receives income from its work .
There are different ways through which merchandise sales are made in business life. Depending on the form and nature of these transactions, and their method of accounting, this type of merchandise sales can be classified into “Sale of merchandise in cash”, “Sale of merchandise with payment by bank” and “Sale of merchandise with payment by commercial effects ”.
Taking these latter differences into account, the accounting entries related to these sales are made with charges between subgroups 43 and 57, according to the General Accounting Plan in Spain . On the other hand, said entry usually takes as value the amount that the sale in question has reached.
Some examples of these distinctions in subgroups based on the details of the transaction can be:
- Sale of merchandise with an invoice discount for prompt payment.
- Sale of merchandise.
- Accessory expenses for the sale of merchandise.
- Sales, the collection of which will be carried out in the long term.
The difference between the sale of merchandise and that of other accounting assets is based on the main object of the sale itself. The sale of merchandise as it is focuses on transactions with elements that have not undergone a transformation or alteration in its composition or production process .
There are also separations for elements that have been able to undergo this change and are subject to sale or for products considered as semi-finished, which have undergone changes in their composition, but not in their production process.
Finally, there is also space in the accounting regulations to contemplate the sales of the waste that is created in the productive processes undertaken by the company but which are not considered a product as such. However, these wastes can often be valuable and sold.