
Concept explainers
Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.
Accounting rules for journal entries:
- a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
- b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.
To Journalize: Journal entry of payment made for balance on July 24 on basis of periodic system.

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Chapter 5 Solutions
Financial Accounting
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