Accounting for Managers - Metcash Limited

Accounting for managers
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Question 1 – Principle activities
Metcash Limited was established in the year 1920 in
Macquarie Park, Australia. It is based in is engaged in
wholesale distributing and marketing for liquor,
hardware segments, foods and grocery. The food and
grocery sector of the entity provides wide range of
services and products related to food and grocery to
convenient retail stores and independent supermarket.
Company’s liquor segment is engaged into distribution
of the liquor products to hotels and retail outlets
(Metcash | Australia’s leading wholesale distribution and
marketing company 2019).
Part A

Question 2 – Revenue recognition
The company recognizes the revenue to the extent it is
apparent that economic benefits will be inflow to the
entity and the amount of the revenue can be measured
reliably. Further, following recognition criteria shall be
met for recognising the revenues –
Sale of the goods – revenue generated from sales of
the goods are recognised after the significant risks and
the rewards related to ownership of goods are
transferred to buyer.
Rental incomes – rental income received are
accounted on straight line basis over the lease term
and are categorized as other income. It is recorded as
income under the period in which it was received
(Metcashannualreport.com 2019).
Supplier income – income received from the suppliers
on the basis of purchase volumes, marketing and
promotional or same kind of activities are recognised
under the income statement as income, after sales of
product.