Perpetual Merchandising Inventory System

Purchases

DR. Merchandise Inventory
CR. Cash/Accounts Payable

Purchases w/ Trade Discount

Merchandise Inventory
Cash/Accounts Payable

Purchase Discount

DR. Accounts Payable
CR. Merchandise Inventory

Purchase Returns

Accounts Payable
    Merchandise Inventory

Purchase Allowance

DR. Accounts Payable
CR. Merchandise Inventory

Transportation-In/Freight-In for Buyer

DR. Merchandise Inventory
CR. Cash

Transportation-In/Freight-In for Buyer Prepaid

DR. Merchandise Inventory
CR. Accounts Payable

Transportation-In/Freight-In for Seller Prepaid

DR. Accounts Receivable
CR. Cash

Transportation Out/Freight Out for Buyer

DR. Delivery Expense
CR. Cash

Transportation Out/Freight Out for Seller Prepaid

DR. Delivery Expense
CR. Accounts Receivable

Transportation Out/Freight Out for Buyer Prepaid

DR. Accounts Payable
CR. Cash

Sales

DR. Accounts Receivable
CR. Sales
DR. Cost of Goods Sold
CR. Merchandise Inventory

Sales Returns

DR. Sales Returns and Allowances
CR. Accounts Receivable
DR. Merchandise Inventory
CR. Cost of Goods Sold

Sales Allowances

DR. Sales Returns and Allowances
CR. Accounts Receivable

Sales Discount

DR. Cash
DR. Sales Discount
CR. Accounts Receivable

Shrinkage

DR. Cost of Goods Sold
CR. Merchandise Inventory

To record goods out on consignment

DR. Inventory on Consignment
CR. Merchandise Inventory

To record cost of consigned goods

DR. Cost of Goods Sold
CR. Inventory on Consignment

To record consignor’s sales value

DR. Accounts Receivable/Cash
CR. Sales Revenue