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A company the inventory account for all purchases of merchandise an freight-in, and it for purchase discounts and purchase returns and allowances. Recording Sales Under
A company the inventory account for all purchases of merchandise an freight-in, and it for purchase discounts and purchase returns and allowances. Recording Sales Under a Perpetual Inventory System When a merchandising company sells inventory, it debits and credits for the selling price of the merchandise. At the same time, it debits and credits for the cost of the inventory items sold. Sales returns and allowances and sales discounts are and are accounts. Adjusting Entries In addition to adjusting entries discussed in chapter 3 , under a perpetual inventory system, a company must adjust the account to agree with the physical count. Closing Entries A merchandising company, like a service company, closes to Income summary all accounts that affect net income. In journalizing, the company all temporary accounts with balances and all temporary accounts with credit balances. It also closes both and to Owners Capital
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