ACC 311 Lecture Notes - Lecture 8: Perpetual Inventory, Retained Earnings, Trial Balance
Inventories include items held for sale in the ordinary course of business, or goods that will be used or consumed in the production of goods to be sold. For manufacturing companies, the inventory amount must be separated into raw materials, work in process, and finished goods. Goods sold (cogs): any difference between the perpetual inventory balance and the physical inventory count is recorded as an adjusting journal entry, periodic inventory system the cost of purchases is recorded into a temporary. Inventory and cogs is recorded as an adjusting journal entry. All items purchased for resale are debited to a purchases account. Requires an adjusting journal entry. made, requires two entries. All items purchased for resale go directly into inventory. Purchased 50 tennis racquets for the pro shop at each, on account. Sold 40 racquets at each, receiving cash. Periodic inventory method: smith, inc. , had the below unadjusted trial balance as of december 31, 2013.