Business assets are also used (for manufacturing businesses) to make goods to sell to others. These goods are also assets, because they too will provide future economic benefits. These benefits, however, are short-term, because the intent is to sell them as quickly as possible, collecting cash, which is then used to purchase additional assets, known as short-term assets inventory. Inventory, in fact, is the major acquisition of a manufacturing company. Although a company may pay cash for its purchases, it is much more common for such purchases to be made on account, which creates an obligation or liability. A natural resource is an asset that is physically consumed and converted into inventory. Some examples of natural resources are coal mines, oil and gas wells, and timber. Natural resources should be recorded at cost, and as the resources are removed through the process of mining, pumping, or cutting, the asset account must be reduced. On the balance sheet, natural resources are usually listed as a separate group of tangible assets. The perpetual inventory accounting system that we have illustrated is designed to produce up-to-date records of inventory and cost of goods sold. Cost of goods sold is the cost of the inventory that the business has sold. It is the largest single expense of most merchandising businesses. Cost of goods sold is the sum of the cost of goods sold amounts recorded during the period. In a periodic inventory system, Cost of goods sold = Beginning inventory + Purchases + Freight in - Ending inventory. Provide examples to show how you would compute net purchases and net sales, including how you would treat the cost of transportation in. I have attached the research link: Principles of Accounting http://www.principlesofaccounting.com/ This is side to arranged in a chapter format and provides detailed information to help you understand some of the important accounting principles.