THE DIFFERENCE BETWEEN PERPETUAL INVENTORY SYSTEM AND PERIODIC IN

date Transaction
purchase of merchandise on credit
5-Jul

puchase returns and allowances

6-Jul

frieght cost on purchase

8-Jul

payment an account with a 2% discount

14-Jul

sale of merchandise on credit

16-Jul

return on merchandise
18-Jul

cash received an accountwith a 1% discount

25-Jul
CE BETWEEN PERPETUAL INVENTORY SYSTEM AND PERIODIC INVENTORY SYSTEM

Perpetual Inventory System Periodic Inventory System

merchandise inventory 40,000 purchase 40,000
account payable 40,000 account payable 40,000
account payable 2,000 account payable 2,000
merchandise inventory 2,000 purchase returns and allowances 2,000
merchandise inventory 200 freight in 200
account payable 200 account payable 200
account payable 38,000 account payable 38000
cash 37,240 cash 37,240
merchndise inventory 760 purchase discount 760
account receivable 24,000 account receivable 24,000
sales revenue 24,000 sales revenue 24,000
cost of good sold 12,000
no entry
merchandise inventory 12,000
sales return and allowances 1,000 sales return and allowances 1,000
account receivable 1,000 account receivable 1,000
merchandise inventory 500
no entry
cost of good sold 500
cash 22,770 cash 22,770
sales discount 230 sales discount 230
account receivable 23,000 account receivable 23,000