Business Administration 2257 Chapter Notes -Income Statement, Flight Controller, European Cooperation In Science And Technology

• School: Western University
• Department: Business Administration
• Course: Business Administration 2257
• Professor: Prof

Document Summary

Cost of goods sold: all transactions that affect merchandise inventory are directly entered into the account, cogafs = begin inventory + purchases + freight-in purchase discounts purchase. Return: when ending inventory is counted, its insertion allows us to make plug figure for cogs. Systems to account inventory: periodic system: merchandise purchase are recorded in the purchases account and inventory account is updated at the end of each accounting period, unlike perpetual, the inventory (counted physically) and cogs are updated periodically. Purchases returns discount = net purchase. Net purchase + freight-in = cost of good purchased. Beginning inventory + cost of good purchased = cog available for sale. Cog available for sale ending inventory = cost of good sold: remember, this years ending inventory is next years beginning inventory, perpetual system: purchases, purchase returns/allowance, etc. are recognized in the inventory account. This is assuming that you are the buyer, other page is seller (perpetual)