[go: up one dir, main page]
Scribd
Upload
199 views1 page

Merchandising Handout - Perpetual Vs Periodic

This document compares and contrasts periodic and perpetual inventory systems for a merchandising business. Under the periodic system, inventory amounts are only updated after a physical count, while the perpetual system maintains continuous inventory records with each transaction. The document provides journal entries for 7 transactions including sales, returns, payments from customers, purchases, freight costs, purchase returns, and payments to suppliers. It shows the different journal entries required under each inventory system to record the transactions.

Uploaded by

Tine
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
199 views1 page

Merchandising Handout - Perpetual Vs Periodic

This document compares and contrasts periodic and perpetual inventory systems for a merchandising business. Under the periodic system, inventory amounts are only updated after a physical count, while the perpetual system maintains continuous inventory records with each transaction. The document provides journal entries for 7 transactions including sales, returns, payments from customers, purchases, freight costs, purchase returns, and payments to suppliers. It shows the different journal entries required under each inventory system to record the transactions.

Uploaded by

Tine
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

Financial Accounting and Reporting

Institute of Accounts Business and Finance


Merchandising Operations

Periodic Inventory System Perpetual Inventory System

1 Sold merchandise on account costing P8,000 for P10,000; terms were 2/10, n/30

Accounts Receivable P10,000 Accounts Receivable 10,000


Sales P10,000 Sales 10,000

Cost of Sales 8,000


Merchandise Inventory 8,000

2 Customer returned merchandise costing P400 that had been sold on account which is part of the P10,000 sale

Sales Returns and Allowances 500 Sales Returns and Allowances 500
Accounts Receivable 500 Accounts Receivable 500
(P10,000*400/8,000)
Merchandise Inventory 400
Cost of Sales 400

3 Received payment from customer for the merchandise sold above. Cash Discount taken.
P10,000 sale minus P500 return x 2% discount = P190

Cash 9,310 Cash 9,310


Sales Discount 190 Sales Discount 190
Accounts Receivable 9,500 Accounts Receivable 9,500

4 Purchased on account merchandise for resale for P6,000; terms were 2/10 n/30.

Purchases 6,000 Merchandise Inventory 6,000


Accounts Payable 6,000 Accounts Payable 6,000

5 Paid P200 freight on the P6,000 purchase; terms were FOB shipping point, freight collect

Freight In 200 Merchandise Inventory 200


Cash 200 Cash 200

6 Returned merchandise costing P300 which is part of the P6,000 purchase

Accounts Payable 300 Accounts Payable 300


Purchase Returns and Allowances 300 Merchandise Inventory 300

7 Paid for merchandise purchased, cash discount taken


P6,000 minus P300 return x 2% discount = P114

Accounts Payable 5,700 Accounts Payable 5,700


Purchase Discounts 114 Merchandise Inventory 114
Cash 5,586 Cash 5,586

Marjorie Anne U. Baladad, CPA

You might also like