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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.
The Buyer would likely perform the following transaction: DR- Account Receivable CR - Merchandise Inventory The Buyer would probably debit CASH if they receive CASH from the Seller instead of having to WAIT on it. The Merchandise Seller would perform the following transaction: DR - Merchandise Inventory CR - Accounts Payable, OR CASH
Merchandise inventory is the quantity of goods that are not being sold and will remain on the companyÕs record or with intent in re-selling the goods to the third party. Goods that are not sold can also be possibly returned to the suppliers.
debit goods returnedcredit accounts receivable
[Debit] Sales returns [Credit] Cash / bank [debit] Sales revenue [credit] sales return
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.
merchandise is returned to seller
The Buyer would likely perform the following transaction: DR- Account Receivable CR - Merchandise Inventory The Buyer would probably debit CASH if they receive CASH from the Seller instead of having to WAIT on it. The Merchandise Seller would perform the following transaction: DR - Merchandise Inventory CR - Accounts Payable, OR CASH
The most appropriate way to account for a return is to have a 'returns account' (or negative sale if you will) to permit the retailer to see what percent of its sales are actually returned. Inventory should be credited accordingly, and the 'COGS' Cost of Goods Sold Account should also be reduced.
You will pass on the information to the retailer. Most likely they have to work and going to everything in returned PCs is unlikely.
In-store credit represents a liability on the part of a company (in most cases a "store") towards another party (usually a customer) that it will satisfy by transfer of assets other than cash (usually store inventory or services). One example would be a retail clothing store. If a customer returns some clothing, the store might give the customer in-store credit instead of cash. The store then has an obligation to provide the customer with more clothing of the same value as the returned goods. Many stores maintain a return policy of in-store credit to limit their loss of revenue on returned items. If the cash is returned, in exchange for the returned goods, it effectively negates the original transaction. If store credit is given instead of cash, the store keeps the cash and simply exchanges one item of inventory for another.
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.
The shipment should have been refused, and returned to the shipper for credit.
Merchandise inventory is the quantity of goods that are not being sold and will remain on the companyÕs record or with intent in re-selling the goods to the third party. Goods that are not sold can also be possibly returned to the suppliers.
yes if u get it before the year end.You cant include it in cost of sales...u should include it in ur closing inventory..i guess so
Refunds are commonly returned to customers in the same method that the customer paid for the merchandise. If one paid with a credit card, then a credit is added to the credit card. If a customer does not have a receipt, the refund is usually issued as a store credit.
debit goods returnedcredit accounts receivable