ACCT 2000 Chapter : Ch 5 Notes
Document Summary
Merchandising companies: buy and sell goods (products, primary source of revenue is ___sales revenue___ __cogs_ is the total cost of goods sold during the period. Ending inventory becomes beginning inventory of the next period. Companies use either a ___perpetual_ inventory system or a __periodic__ inventory system account for inventory. Periodic method!!: calculation of cost of goods sold example: 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. Less: ending inventory ___8000-determined by a physical count__ We will learn how to record inventory related transactions using the perpetual system. Can be made using cash or credit ( accounts payable) Purchase invoice should support each credit purchase. Sauk stereo (the purchaser) would record this purchase as: Assume upon delivery of the goods on may 6, sauk stereo pays haul-it freight.