Differences Between Perpetual and Periodic Inventory Systems—Purchase Transaction

perpetual

Purchase of Inventory—

$35,000 on account,

terms 3/15, n/3

Merchandise Inventory- debit 35000

Accounts Payable - credit 3500

PERIODIC- ignore the word inventory

Purchase of Inventory—

$35,000 on account,

terms 3/15, n/3

D. PURCHASES - 35000

C. ACCOUNT PAYABLE - 35000

Purchase Returns and

Allowances—$7,000 of

inventory return

PERPETUAL

D. Accounts Payable = 7000

C. Merchandise Inventory= 7000

Purchase Returns and

Allowances—$7,000 of

inventory return

PERIODIC

Accounts Payable= 7000

Purchase Returns and Allowance = 7000

Accounts Payable

Purchase Returns and Allowance

PERPETUAL

Accounts Payable

Cash

Merchandise Inventory

Accounts Payable

Cash

Purchase Discount

Payment Less Purchase

Returns and Purchase

Discount

PERIODIC

Transportation Costs—

$60 payment of

freight in

PERPETUAL

d. Merchandise Inventory- 60

c. Cash- 60

PERIODIC

Transportation Costs—

$60 payment of

freight in

D. FREIGHT in - 60

C. cash- 60