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Week 4 - Inventories (Income measure for a retailer (Sales Revenue - Cost…
Week 4 - Inventories
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Settlement Discount
When we GIVE a discount
- Dr Account Receivable and Cr Sales Revenue
- Dr Cash at Bank and Dr Discount Expense and Dr Account Receivable
When we GET a discount
- Dr Inventory and Cr Account Payable
- Dr Account Payable and Cr Cash at Bank and Cr Discount Revenue
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Perpetual Method (record the inflows and outflows of inventories continuously) so that in the end of each period => can determine the gain/ loss of inventory. In Perpetual Method, each transaction has 2 journal entries