Parrish Pg. 168 Recording Inventory I have two transactions for recording inventory. One is the periodic method and one is the perpetual method. I have two questions, please answer both of them! 1) Explain with regard to this specific transaction example how the two methods work 2) Why is there an additional step in the perpetual method with the COGS and Inventory transaction Sale of Merchandise Costing $200 for $325 ( what does costing $200 for $325 mean??) Periodic Method Accounts Receivable or Cash 325 Sales Revenue 325 Perpetual Method Accounts Receivable or Cash 325 Sales Revenue 325 AND Cost of Goods Sold 200 Inventory 200
Parrish Pg. 168 Recording Inventory
I have two transactions for recording inventory. One is the periodic method and one is the perpetual method. I have two questions, please answer both of them!
1) Explain with regard to this specific transaction example how the two methods work
2) Why is there an additional step in the perpetual method with the COGS and Inventory transaction
Sale of Merchandise Costing $200 for $325 ( what does costing $200 for $325 mean??)
Periodic Method
Sales Revenue 325
Perpetual Method
Accounts Receivable or Cash 325
Sales Revenue 325
AND
Cost of Goods Sold 200
Inventory 200
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