Perpetual vs Periodic Inventory System

Journal Entry for Receipt of Goods for Resale Under a Perpetual Inventory System

Debit Inventory

Credit Accounts Payable or Cash

Where is freight-in debited and purchase returns and allowances credited in a perpetual inventory system

Inventory

How to record a sale with a perpetual inventory system

Debit cost of goods sold and credit inventory

How does a company using the periodic inventory system record acquisitions of inventory

It records all acquisitions of inventory during the accounting period by debiting the Purchases account.

Under a periodic inventory system, how are goods available for sale calculated

Beginning inventory+ Purchases

Under a periodic inventory system, how is the cost of goods sold recorded

Beginning inventory + purchases - ending inventory