Question

1.) What is the journal entry to record the purchase of inventory using the perpetual method of accounting?

2.) What is the journal entry to record the return of an item purchased for inventory using the perpetual method of accounting?

3.) What are the journal entries to record the sale of merchandise inventory using the perpetual method of accounting?

4.) What are the journal entries to record a sales return of merchandise inventory using the perpetual method of accounting?

5.) What, if any, month end adjustments are required related to the sale of merchandise inventory using the perpetual method of accounting?

Answer 1

No.	Accounts	Debit	Credit
1.	Merchandise inventory	xx
	Accounts payable / Cash		xx
2.	Accounts payable / Cash	xx
	Merchandise inventory		xx
3a	Accounts receivables / Cash	xx
	Sales		xx
3b	Cost of goods sold	xx
	Merchandise inventory		xx
4a	Sales returns and allowances	xx
	Accounts receivables / Cash		xx
4b	Merchandise inventory	xx
	Cost of goods sold		xx
5a	Cost of goods sold (if understated)	xx
	Merchandise inventory		xx
5b	Sales	xx
	Income Summary		xx
5c	Income Summary	xx
	Sales returns and allowances		xx
	Cost of goods sold		xx