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Perpetual vs Period *Gross/ Net*

  1. Purchases $1,000 of inv. with terms 2/10

    Perpetual, Gross
    • Inv.        $1000
    •       A/P         $1000
  2. Purchases $1,000 of inv. with terms 2/10

    Periodic, Gross
    • Purchase    $1,000
    •       A/P               $1,000
  3. Purchases $1,000 of inv. with terms 2/10

    Perpetual, Net
    • Inv.        $980
    •      A/P          $980
  4. Purchases $1,000 of inv. with terms 2/10

    Periodic, Net
    • Purchases     $980
    •          A/P           $980
  5. Returned $200 of inv (2/10)

    Perpetual Growth
    • A/P        $200
    •      Inv.        $200
  6. Returned $200 of inv (2/10)

    Periodic, Gross
    • A/P       $200
    •       Purch return & allowance   $200
  7. Returned $200 of inv (2/10)

    Perpetual, Net
    • A/P         $196
    •       Inv.           $196
  8. Returned $200 of inv (2/10)

    Periodic, Net
    • A/P       $196 
    •       Purch Return & allowance      $196
  9. Typically less expensive
    Periodic
  10. More accounts allow for more info kept on purchases, returns, discounts
    Periodic
  11. Everything is in & out the inventory account
    Perpetual
  12. Typically used for more expensive items
    Perpetual
  13. Inventory
    Periodic and perpetual
  14. Periodic Accounts used:
    • Purchases (cost of merch/ exp)
    • Purchases Returns and allowances
    • Purchases discount
    • Discount lost (net method)
  15. NB of purchases
    Debit
  16. NB of purchases returns and allowances
    Credit
  17. NB of purchases discount
    Credit
  18. NB of discount lost
    Debit
  19. NB of discount lost
    Debit
Author
GoBroncos
ID
357117
Card Set
Perpetual vs Period *Gross/ Net*
Description
Updated

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