What is an Estimated Returns Inventory An example of a Closing journal entry for sales revenue and sales...

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Accounting

What is an Estimated ReturnsInventory
An example of a Closing journal entry for sales revenue andsales discounts forfeited.
An example of Journal entry to record cost of merchandise soldunder perpetual inventory system.
what is the Lower-of-cost-or-market (LCM) rule
Description of a good merchandiseinventory control system.
Formula to calculate weighted-averageunit cost for merchandise inventory.

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1 the amount of merchandise that is estimated to be returned by customers debit credit 2 a Sales Revenue xxxxx Income Summary xxxx b Income Summary xxxxx Sales Discount xxxx 3 Inventory xxxxx Accounts Payable xxxx Merchandise inventory is the cost of goods on hand and available for sale at any given time Merchandise inventory also called Inventory is a current asset with a normal debit balance meaning a debit will increase and a credit will decrease To determine the cost of goods sold in any accounting period management needs inventory information Management must know its cost of goods on hand at the start of the period beginning inventory the net cost of purchases during the period and the cost of goods on hand at the close of the period ending inventory Since the ending inventory of the one period is the beginning inventory for the next period management already knows the cost of the beginning inventory Companies record purchases purchase discounts purchase returns and allowances and transportationin throughout the period Therefore management needs to determine only the cost of the ending inventory at the end of the period in order to calculate cost of goods sold Cost of goods sold is the inventory cost to the seller of the goods sold to customers Cost of Goods Sold is an EXPENSE item with a normal debit balance debit to increase and credit to decrease Even though we do not see the word Expense this in fact is an expense item See Answer

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