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In what discounts lost account implies that the recorded cost of a purchased inventory items is its?
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When merchandise is purchased to resell to customer's it is recorded in the account entitled?
merchandise inventory
How are purchase discounts and purchase returns recorded by a company using the periodic inventory system?
They are recorded as a direct reduction to the Purchases account.
Definition of purchases account?
Ledger account in which all inventory purchases are recorded; used generally with periodic inventory method
What purchase of supplies on account is recorded in the?
The amount which is paid on account(credit) should be recorded in a liability account i believe while record the purchased supplies in the asset.
In which journal is the return of supplies purchased on account recorded?
General Journal
When merchandise is purchased to resell to customer's it is recorded in the account entitled?
merchandise inventory
How are purchase discounts and purchase returns recorded by a company using the periodic inventory system?
They are recorded as a direct reduction to the Purchases account.
Definition of purchases account?
Ledger account in which all inventory purchases are recorded; used generally with periodic inventory method
What is the difference between periodic and perpitual inventory system?
Periodic Inventory System Inventory account and cost of goods sold are non-existent until the physical count at the end of the year. Purchases account is used to record purchases. Purchase Return account is used to record Purchases Returns account. Cost of goods sold or cost of sale is computed from the ending inventory figure For goods returned by customers there are no inventory entries. Perpetual Inventory System Account and the balance of costs of goods sold and inventory account exist all the time. No individual purchases account but the purchases are recorded in the Inventory Account. No individual Purchase Returns account but the purchases return are recorded in the Inventory Account. Record cost of goods sold/cost of sale - inventory is reduced when there is a sale. Returns from customers are recorded by reducing the cost of goods sold and adding back into inventory.
What purchase of supplies on account is recorded in the?
The amount which is paid on account(credit) should be recorded in a liability account i believe while record the purchased supplies in the asset.
In which journal is the return of supplies purchased on account recorded?
General Journal
How should a return of merchandise purchased on account be recorded?
As a debit to the accounts payable account and a credit to the purchases returns and allowances account
What is inventory account?
inventory clearing
What is the difference between periodic inventory and perpetual inventory?
Periodic inventory method calculate ending stock at the end of the accounting period, which could be Month to Date or Year to Date, while Perpetual inventory system calculates the ending stock on a continuous basis after each transaction (Purchase or Sell). Within Retail industry, periodic inventory method used for inventory valuation at the stores, whereas distributer like SuperValu (in US) follows perpetual inventory method to track inventory in their distribution centers. As a best practice, some of the retail companies are using perpetual accounting method to track inventory available in warehourses and distribution centers. In an idealistic world, perpetual inventory method can provide the true and real time inventory information, however due to complexities in consolidating all the purchases, sales, shrinkages and other market factors, it is advisable for retail companies to follow periodic accounting method to analyze and review the results before presenting the inventory valuation results to internal and external agencies like Shareholders, Income Tax Authorities, et el.
What is inventory clearing account?
inventory clearing
How is recorded a cash payment received from a customer for a product purchased on account?
debit to cash and credit to accounts receivable
How is a cash payment received from a customer for a product purchased on account recorded?
debit to cash and credit to accounts receivable
