| A | B |
|---|
| Sales Returns and Allowances (by sales price returned) | Seller records transaction by cr. A/R and Sales Accounts |
| Sales Returns and Allowances (by seller cost) | Seller records transaction by cr. COGS; dr. MI |
| Credit sale (by sales price) | Seller will record transaction as =>dr. A/R, Sales |
| Credit sale (by seller cost) | Seller records transaction as => dr. COGS; cr. MI |
| Freight cost by seller | Operation expense |
| Freight cost by buyer | cost of purchase in inventory MI = dr. |
| Purchase Discount | Amt of purch discount decreases amt of MI |
| Purchase Returns/Allowances | Buyer records following transaction => dr. A/P, cr. MI |
| Credit purchase of merchandise for sale | Buyer records following transaction => dr. MI, cr. A/P |
| Purchases recorded when goods received | Buyer records following transaction => dr. MI, cr. Cash |
| Periodic Inventory System | Beginning COGS; Add: COGS Purchased during period; Less: COGS on hand at end |
| Perpetual Inventory System | COGS determined each time sales occurred |
