accouting - perpetual system

buyer → purchasing merchandise

inventory (debit)

• accounts payable/cash (credit)

seller → selling merch

cash/accounts payable (debit)

• sales revenue (credit)

cost of goods sold (debit)

• inventory (credit)

buyer → freight costs

inventory

• cash

seller → freight costs

freight out

• cash

buyer → discounts → if availed the discount

accounts payable [total - return]

• inventory [discount amount]

• cash [total - discount]

buyer → discounts → if did not take discount

accounts payable [total - return]

• cash [total - return]

seller → discounts

cash [total - disc]

sales discount [discount amount]

• account receivables [total - returns]

buyer → returns (flip of purchasing)

accounts payable

• inventory

seller → returns (flip of selling)

sales returns and allowances [return amount]

• accounts payables [return amount]

inventory [defect amount] [cost]

• cost of goods sold [defect amount] [cost]

sales revenue - cost of goods sold =

= gross profit

gross profit - operating expense =

= net income