MERCHANDISE INVENTORY.pptx - MERCHANDISE INVENTORY...

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MERCHANDISEINVENTORY
MERCHANDISINGINVENTORYConsists of goods on hand and availablefor sale to customers.Merchandise Inventory on hand at thebeginning – beginning inventoryMerchandise Inventory on hand at theend– ending inventory
METHODS OF ACCOUNTINGFOR MERCHANDISEINVENTORYPeriodic Inventory Method – count of the physicalinventory takes place periodically- COGS is determined at the end of the accounting period-Purchases is accumulated in the Purchase account-Purchases returns and allowances and purchasesdiscounts are recognized in a separate nominal account-Actual Count of physical inventory is deducted frompurchases and beg inventory
DATEPARTICULARSDEBITCREDIT12/31Income summaryxx,xxxMerchandise Inty(beg)xx,xxxTo closebeginning inventory12/31Merchandise Invty, endxx,xxxIncome Summaryxx,xxxTo set upending invty
METHODS OF ACCOUNTINGFOR MERCHANDISEINVENTORYPerpetual Inventory Method – records are kept of the quantity,and usually, the cost of individual items of inventory as theybought and sold-Purchases is debited to the “Merchandise Inventory” account-Purchases returns and allowances and purchase discounts arecharged to Merchandise Inventory account-Sold items is credited to the Merchandise Inventory account-Cost of Goods Sold is debited of the cost of the items sold

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Term
Fall
Professor
N/A
Tags
Goods Sold

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