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Unformatted text preview: balance sheet with the opposite entry posted to the income statement. An example of this is included in the journals below. Example journals: A. Purchase of $1000 of parts to be used in the manufacture of a motorcycle. Payment for the goods is made on receipt of the parts. Balance sheet Dr - inventory (balance sheet) - $1000 Cr - bank account - $1000 Income statement Dr - purchases - $1000 Cr - inventory (balance sheet) - $1000 B. Sale of motorcycle for $2,500 which is currently held in inventory for $1,750. Receipt for motorcycle is received upon delivery to the customer. Balance sheet Dr - bank account - $2,500 Cr - inventory (balance sheet) - $1,750 Income statement Dr - inventory (income statement) - $1,750 Cr - income - $2,500...
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This note was uploaded on 02/17/2012 for the course ITCO 101 taught by Professor Gugenhiem during the Spring '12 term at AIU Online.
- Spring '12