Journal Entries for Chapter 5 Flashcards
COGS perpetual system
entry is made to record COGS each time a sale is made
COGS periodic system
not determined until end of period:
gross profit =
sales revenue- COGS
net income/loss =
gross profit-operating expenses
cost of goods available for sale =
beginning inventory + Cost of goods purchased
COGS (periodic) =
COGAFS - ending inventory
journal entry: purchase (perpetual)
dr. inventory
cr. a/p
journal entry: freight you pay when selling (perpetual)
dr. freight out
cr. cash
journal entry: freight paid to seller when you’re buying (perpetual)
dr. inventory
cr. cash
journal entry: purchase return (perpetual)
dr. a/p
cr. inventory
journal entry: buying w/ discount (perpetual)
dr. a/p
cr. inventory
cr. cash
journal entry: record a sale (perpetual)
dr. a/r
cr. sales revenue
dr. COGS
cr. inventory
journal entry: sales r/a (perpetual)
dr. sales r/a
cr. a/r
dr. inventory
cr. COGS
journal entry: sales discount (perpetual)
dr. cash
dr. sales discount
cr. a/r
journal entry: purchase (periodic)
dr. purchases
cr. a/p
journal entry: paying freight to seller when buying (periodic)
dr. freight in
cr. cash
journal entry: purchase return (periodic)
dr. a/p
cr. purchase r/a
journal entry: purchase discount (periodic)
dr. a/p
cr. purchase discount
cr. cash
journal entry: sale (periodic)
dr. a/r
cr. sales revenue
journal entry: sales r/a (periodic)
dr. sales r/a
cr. a/r
journal entry: sales discount (periodic)
dr. cash
dr. sale discount
cr. a/r
3 important line items for a multi-step income statement
1) gross profit
2) income from operations
3) net income
