Periodic Inventory Accounting
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- Опубліковано 4 чер 2015
- This video discusses the periodic inventory method. Whereas firms using the perpetual inventory method continuously adjust the inventory balance each time they buy or sell inventory, firms using the periodic inventory method instead track inventory by performing a count of inventory at the end of each period. Inventory that is purchased throughout the year is temporarily recorded to a "Purchases" account and Cost of Goods Sold is computed at the end of the period via the follow equation: Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory-
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Thank you. I am extremely depressed.
Dnxbdb same man
@@maggieskilbred8883 exam tomorrow, realized i forgot to attended classes
too real, this 5 year old comment made me feel less alone
Excellent explanation. Thank you very much. Keep on sending examples of periodic and perpetual inventory accounting.
Great teaching, thank you.
Thank you! Very clear explanation!!
Thank you for this
since the purchases account is zeroed out, does it go on the income statement?
That equation...
You could have left it in its usual form: Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold. You would have gotten the same answer with only half the algebra skills used.
What would happen if we discover obsolete inventory during the period? Would we just throw it out and then record the expense in cogs at the end of the period through the lower closing inventory count?
You would credit inventory to remove the obsolete inventory from your books, and debit either COGS or an allowance account for obsolete inventory. It all depends on how the company's accounts are set up. Great question!
thank you so much, for making it this simple...
No problem!
In periodic inventory is the temporary Purchase Account considered under the expense side of the equation as a normal credit account?
So, this system can't detect a thief, right?. The other one would stop any difference between actual sales and what's left in the inventory, but this will assume al missing inventory was sold, not spotting inventory that is missing because of other factors.
Thank you for posting
Great this was very helpful
?if i have purchase returns allowances and purchase discount ,how can i calculate it
I have a video on sales returns and allowances on my website. You can check it out here: edspira.com/topic/sales-returns-allowances Thanks for watching!
While closing entries we should debit the income summary and cedit the beginning inventory...also we should debit the ending inventory and credit the income summary..right ?
Inventory is a permanent account that is already on the Balance Sheet, so does not get closed-out at year end. You would not need to do these entries. Great question!
Saved me again😭❤
Why leave out sold inventory, I.e. 750 @ $12
Does it always have to be Accounts Receivable being debited or is this just for the purposes of the video? For example what if cash purchases were made?
If someone paid you cash, then you would record cash. I just used Accounts Receivable for for the purpose of this video.
@@Edspira Thanks so much
How did we estimated the ending inventory by 500 ? Lifo ? Fifo ?
It could be either LIFO or FIFO depending on the company. The company chooses which inventory method to use, and will consistently use the same method each year. I have 16 videos on inventory if you are interested: edspira.com/lessons/inventory Thanks for watching!
very useful
thanks a lot for vdo
No problem!
fantastic
You credited purchases and didn't have a balancing entry for that.
Seems like perpetual is probably easier
It's like listening to american actor Owen Wilson talk about accounting.
That equation...
You could have left it in its usual form: Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold. You would have gotten the same answer with only half the algebra skills used.