Periodic and Perpetual Method Journal Entries

Purchasing inventory (perpetual, buyer)

debit inventory, credit cash or accounts payable

Transportation costs (perpetual, buyer)

debit inventory, credit cash

Purchase return / allowance (perpetual, buyer)

debit accounts payable, credit inventory

purchase with discount (perpetual, buyer)

debit accounts payable, credit inventory and cash

purchase without discount (perpetual, buyer)

debit accounts payable, credit cash

selling inventory (perpetual, sellers)

debit accounts receivable, credit sales revenue

sales returns (perpetual)

debit sales returns / allowances, credit accounts receivable

sales discounts (perpetual)

debit cash and sales discount, credit accounts receivable

shipping for the selling (perpetual)

debit freight out expense, credit cash

purchase (buyer, periodic)

debit purchases, credit accounts payable

purchase returns (buyer, periodic)

debit accounts payable, credit purchase returns

purchase discount (buyer, periodic)

debit accounts payable, credit purchase and cash

shipping (FOB shipping, periodic)

debit freight in, credit cash

sales (seller, periodic)

debit accounts receivable, credit sales revenue

sales returns (seller, periodic)

debit sales returns, credit accounts receivable

sales discounts (sellers, periodic)

debit cash and sales discounts, credit accounts receivable

shipping (FOB destination, periodic)

debit SG&A expense, credit cash