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Unformatted text preview: Full amount due in 30 days Purchase discounts Company receives discount if it makes payment early Reduces cost of inventory Sales discounts Company offers discount to customers for early payment Reduces cash received on accounts receivable Perpetual Entries To record purchases of inventory on account Perpetual Entries To record sale of inventory on account Two entries required Understand the various inventory methods Inventory Costing Methods To determine the cost of inventory sold or on hand, the units are multiplied by the unit cost Inventory items are often purchased at different prices throughout the year Company selects a costing method to determine which unit cost to use...
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