Merchandising Entries (FA exam 2)

Purchasing merchandise for resale

D. merchandise inventory

C. cash or accounts payable

paying freight costs on purchases (FOB shipping point)

D. merchandise inventory

C. cash

paying within discount period

D. accounts payable

C. merchandise inventory

C. cash

paying outside discount period

D. accounts payable

C. cash

Recording purchases returns or allowances

D. cash or accounts payable

C. merchandise inventory

selling merchandise

D. cash or accounts receivable

C. sales

D. cost of goods sold

C. merchandise inventory

receiving payment within discount period

D. cash

D. sales discount

C. accounts receivable

receiving payment outside discount period

D. cash

C. accounts receivable

receiving sales returns of nondefective inventory

D. sales returns and allowances

C. cash or accounts receivable

D. merchandise inventory

C. cost of goods sold

Adjusting (adjustment for shrinkage)

D. costs of goods sold

C. merchandise inventory

Closing temporary accounts with credit balances

D. sales

C. income summary

closing temporary accounts with debit balances

D. income summary

C. sales returns and allowances

C. sales discounts

C. cost of goods sold

C. delivery expense

C. other expenses