00:02
Hello, in this video we're going to journalize different sales and inventory transactions.
00:09
So let us begin on march 15.
00:14
Allow me to read monroe sales sells $9 ,525 on account to garrison brewer with terms to over 10 and over 30.
00:25
So since this is a sale on account, then we need to debit our accounts receivable.
00:37
In the amount of 9 ,525, and we need to credit our sales revenue since you have sold an item or an inventory to garrison brewer.
00:55
So the amount is 9 ,525.
01:05
For the next transaction i'm sorry we need also to update our inventory count so on the same date the cost of goods sold was 6 ,905 so since we're using a perpetual method of accounting our inventories then from time to time we need to update or record inventory changes real time so opposed to periodic method of accounting inventories in perpetual method you need to update the inventory changes from time to time so that the book records actually matches with the real count of inventory in your warehouse so let us update our inventory by crediting your inventory and limiting your cost of goods sold cost of good sold by 6 ,905 and credit your inventory since your inventory decreases since you have sold an item.
02:33
So for the next one, on march 20, let's proceed to march 20.
02:39
A $125 credit memo is given to garrison brewer due to merchandise that was drunk.
02:47
Caller journalize this event so we need to update now our accounts receivable account since the customer returned a specific merchandise or a specific inventory so what we need is we need to reverse your accounts receivable by crediting accounts receivable this means to say that the amount of your collectibles decreases because your customer or garrison brew would return a specific merchandise.
03:32
So the commonly used account for returns and it allowants it for merchandise returns i mean is sales returns and this is a contra sales account sales return.
04:00
So the normal balance for this is debit, sales returning allowances, that's $125.
04:17
And on the very same date, you need also to update your inventory count.
04:23
Again, if there's a sales or there's a return of sales, automatic you need to update your inventory account in both transactions.
04:37
So since you have received a merchandise as a return, so you need to debit your inventory or other specifically used merchandise inventory account.
04:51
And credit your cost of goods sold.
04:54
You're just going to reverse that entry.
04:58
But by this time, only specific to the amount that was returned.
05:03
And it was told in the problem, the cost of the price of the.
05:08
Merchandise that was returned was $65...