Inventory Journal Entries | Perpetual Inventory System | Explained with Examples

In this accounting lesson, we explain what the Perpetual Inventory System is and go through an example where we do the journal entries under the perpetual inventory system. We go through transactions where we bough inventory using cash and where we sold inventory. In our journal entry, we account for inventory, bank, sales, cost of sales..
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[@atolomartha2117]

I love the simplicity sir, thanks 🙏

[@paulinamorales5833]

thank you

[@vishvashah291]

Hey Nice video But I have a question.
For the first journal entry for purchase of inventory you have mentioned DR. Inventory CR. Bank which I agree. But is it also fine if we record the following two journals for the purchase of inventory? DR. Cost of Sales CR. Bank and DR. Inventory CR. Cost of sales ? I believe if we purchase inventory we need to to also give an effect to the cost of sales because "purchase" is a part of 'Cost of Sales'.

[@Vanessa_TK]

Hi. Is it not supposed to be 30 units multiplied by R20?

[@lesedijoshua4707]

Same here i am lost

[@jamestankrist]

No. it is not. When calculating cost of goods sold, what we use is the cost we spend to buy the inventories, not the price of the inventories sold. Hope it helps :)

[@2308Rochelle]

Hi you made an error with the cost of sales. It is not xR10 it is xR20. You read the first transaction instead of the second.

[@dumsilecele7490]

Hi
Where is R300 for cost of sales coming from

[@amoslubisi3480]

30 units multiply by R10 per unit