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Ending inventory is not really a contra account because it is to be subtracted from cost of goods available for sale to compute cost of goods sold on the entity's income statement. Ending inventory is presented on the balance sheet at the end of a fiscal period as an asset. Contra accounts are presented on the balance sheet as reductions of another related account.
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What are the accounting journal entries to record a purchase of inventory at a distressed price?
If the inventory has some value then it must be entered in a new general ledger expense account and have a new contra asset account for the items. Enter the estimated value as a debit to the inventory obsolescence account and then credit it to the inventory reserve account.
What are the accounting journal entries to record the adjusting entry in a periodic system with an ending inventory of 15000 and a starting inventory of 20000?
Debit inventory expenses 5000Credit inventory account 5000
What two accounts are affected by the adjusting entry Merchandise Inventory?
The two accounts affected by the adjusting entry for Merchandise Inventory are the Merchandise Inventory account and the Cost of Goods Sold (COGS) account. When the inventory is adjusted to reflect the actual count or value, the Merchandise Inventory account is updated to show the correct ending balance, while the COGS account is adjusted to account for any changes in the total cost of inventory sold during the period. This adjustment ensures accurate financial reporting and inventory management.
How drawings account is contra equity account?
Drawing account is used to reduce the capital by the owners of the business from business that's why it is called the contra account for equity account.
The inventory turnover is calculated by dividing cost of goods sold by?
ending inventory
What are the accounting journal entries to record a purchase of inventory at a distressed price?
If the inventory has some value then it must be entered in a new general ledger expense account and have a new contra asset account for the items. Enter the estimated value as a debit to the inventory obsolescence account and then credit it to the inventory reserve account.
What are the examples of capital contra account?
is accumulated depreciation a contra account
What are the accounting journal entries to record the adjusting entry in a periodic system with an ending inventory of 15000 and a starting inventory of 20000?
Debit inventory expenses 5000Credit inventory account 5000
Is drawings account is a contra account?
Drawings account is a contra account because it reduces the owner's equity account's normal balance, a credit balance.
What is an account that reduces a related account?
A contra account
How drawings account is contra equity account?
Drawing account is used to reduce the capital by the owners of the business from business that's why it is called the contra account for equity account.
The inventory turnover is calculated by dividing cost of goods sold by?
ending inventory
Is a contra account a debit or credit account?
That depends, it could be either. a contra-asset account would be just the opposite of an asset. All assets have a debit balance (increase with debit) therefore a contra-asset account would be a credit. The same holds true with a contra-liability account, it is just the opposite, a liability maintains a credit balance (increases with a credit) therefore a contra-liability account would be a debit.
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.
An account which is offset against another account is?
contra
Is a contra account balance a debit or credit?
A contra account balance is a debit balance account. It is a general ledger account that has a balance that is an exact opposite of a normal balance. Contra accounts are generally used to report the gross and the net amount of an organization.
What is contra account?
A contra-account is a sub-account or a related account that normally has the opposite balance, thereby reducing the balance of the main account. For example, Reserve for Bad Debts is a contra-account to Accounts Receivable. A/R normally has a debit balance while the reserve normally has a credit balance.
