In the case of the periodic system, the net purchase will be only $1,000 for the goods, so the company needs to make an allowance of $500 to offset the amount of $1,500 at the beginning of the purchase entry. Under perpetual system: Account Debit Credit Accounts payable 5,00 Inventory 5,00 Under periodic system: Account Debit Credit Accounts payable 5,00 Purchase returns and allowances 5,00 does not return goods but it receives $500 as compensation for the inferior quality goods, it can make the journal entry as below: If the company does not return the goods but receives compensation for it, the journal entries for both inventory systems are still with the same accounts for the debits and credits as the goods returned. Compensation is received for not returning goods In this journal entry, both assets (inventory) and liabilities (accounts payable) are reduced by $1,500 for the purchase return transaction.ģ. uses the perpetual inventory system, it can make the journal entry for purchase return on October 21, 2020, as below: Account Debit Credit Accounts payable 1,500 Inventory 1,500 In this case, $1,500 will be offset with the amount of purchase during the period when the company calculates the cost of goods sold. can make the journal entry for the purchase return on October 21, 2020, as below: Account Debit Credit Accounts payable 1,500 Purchase returns and allowances 1,500 Under the periodic inventory system, ABC Ltd. and it does not have to return the goods?
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |