Principles of Financial Accounting · free preview
Periodic Inventory Entries for Purchases and Sales
Under the periodic system, purchases, freight, discounts, and returns route through dedicated temporary accounts, and cost of goods sold emerges at period end through closing entries against the counted inventory.
1. A different route for the same economics
A different route for the same economics
2. Sales stay one-sided
Sales stay one-sided
3. End-of-period closing under periodic
End-of-period closing under periodic
4. Reconciling the two systems
Reconciling the two systems
5. Periodic purchase entry
Under the periodic system, how is a 10,000 dollar credit purchase of merchandise recorded?
6. Periodic sale entry
A periodic system records a 20,000 dollar merchandise sale on credit with which entry?
7. Where periodic cost comes from
Under a periodic system, what determines cost of goods sold for the period?
8. Closing purchases under periodic
In the period-end closing entries under a periodic system, which account is credited to empty its balance into the cost of goods sold computation?
9. Net cost of purchases
Purchases were 38,000 dollars, freight-in 300 dollars, purchase returns 1,000 dollars, and purchase discounts 200 dollars. Compute net additions to inventory cost in dollars, number only.
10. Periodic cost of goods sold
Beginning inventory was 10,000 dollars, net purchases were 37,100 dollars, and the counted ending inventory is 12,000 dollars. Compute periodic cost of goods sold in dollars, number only.
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