[Anonymous]

I am not really sure how to record this transaction. So this organization buys products from local merchandise and resell those merchandise to customers for a higher price.

How do they record transactions

1. When they buy products from local merchandise?

2. When they sell these products to customers?

I have journal entries on my mind but I am not sure I am right.. Will you please give possible journal entries? Thank you! 🙂

[Anonymous]

assuming cash basis accounting:

credit cash for purchase

debit inventory for purchase

debit cash for sales

credit sales revenue for sales

debit COGS for sales

credit inventory for sales

just guessing, but that would be my thoughts…

[Anonymous]

assuming cash basis accounting:

credit cash for purchase

debit inventory for purchase

debit cash for sales

credit sales revenue for sales

debit COGS for sales

credit inventory for sales

just guessing, but that would be my thoughts…

[Anonymous]

if using accrual basis you would simply substitute the appropriate receivables and payables accounts where necessary and possible bad debt expenses and allowance accounts for returns could be factors as well

[Anonymous]

if using accrual basis you would simply substitute the appropriate receivables and payables accounts where necessary and possible bad debt expenses and allowance accounts for returns could be factors as well

[mla1169]

Exactly what Dethnode said. Remember there needs to be two entries at the time of sale- one to record the revenue and another to relieve the inventory.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[mla1169]

Exactly what Dethnode said. Remember there needs to be two entries at the time of sale- one to record the revenue and another to relieve the inventory.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[Anonymous]

@Dethnote, mia 1169. Thanks a lot!!! 🙂

[Anonymous]

@Dethnote, mia 1169. Thanks a lot!!! 🙂

[Author]

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