ACCT 2000 Chapter : Chapter 5 Notes
Document Summary
Merchandising companies: buy and sell goods, primary source of revenue is sales revenue. Net income (loss) cost of goods sold during the period (an expense account) Companies use either a perpetual inventory system or a periodic inventory system account for inventory. Cindy"s boutique had ,000 of inventory on hand at the start of the year. During the year, she purchased ,000 of inventory. At year-end, she counted inventory with a cost of ,000 on hand. We will learn how to record inventory related transactions using the perpetual system. Purchase invoice should support each credit purchase. Saulk stereo (the purchaser) would record this purchase as: Assume upon delivery of the goods on may 6, sauk stereo pays haul-it freight. Company for freight charges, the entry on sauk stereo"s books is: A purchaser may be dissatisfied because goods are damaged or defective, of inferior quality, or do not meet specifications. Purchase allowance keep goods with a price reduction.
