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    Accounting For Merchandising Business - Sample Transactions

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    Leica Jayme
    This document provides examples of accounting transactions for merchandising businesses, including purchases, sales, payments, returns, discounts and transportation costs. Sample transactions show journal entries for the buyer and seller. Guidelines are given for transactions involving discounts, returns, down payments and different terms for freight. A sample case asks the reader to provide journal entries for purchases, a return, payment with a discount and a later sale with a return.

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    © All Rights Reserved
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    Accounting For Merchandising Business - Sample Transactions

    Uploaded by

    Leica Jayme
    1K views12 pages
    This document provides examples of accounting transactions for merchandising businesses, including purchases, sales, payments, returns, discounts and transportation costs. Sample transactions show journal entries for the buyer and seller. Guidelines are given for transactions involving discounts, returns, down payments and different terms for freight. A sample case asks the reader to provide journal entries for purchases, a return, payment with a discount and a later sale with a return.

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    Accounting for Merchandising Business- Sample Transactions.pptx

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    This document provides examples of accounting transactions for merchandising businesses, including purchases, sales, payments, returns, discounts and transportation costs. Sample transactions show journal entries for the buyer and seller. Guidelines are given for transactions involving discounts, returns, down payments and different terms for freight. A sample case asks the reader to provide journal entries for purchases, a return, payment with a discount and a later sale with a return.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    1K views12 pages

    Accounting For Merchandising Business - Sample Transactions

    Uploaded by

    Leica Jayme
    This document provides examples of accounting transactions for merchandising businesses, including purchases, sales, payments, returns, discounts and transportation costs. Sample transactions show journal entries for the buyer and seller. Guidelines are given for transactions involving discounts, returns, down payments and different terms for freight. A sample case asks the reader to provide journal entries for purchases, a return, payment with a discount and a later sale with a return.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12
    At a glance
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    The document discusses various accounting transactions for merchandising businesses including purchases, sales, returns and discounts.

    Transactions discussed include purchases, sales, returns, discounts and down payments.

    Terms discussed include COD, n/30, 2/10 n/30, 50% downpayment and balance n/30, FOB shipping point and FOB destination point.

    Accounting for

    Merchandising Business
    Cymon P. Argawanon, CPA
    Sample Transactions with discounts

    Transaction BUYER’S Book SELLER’S Books


    1. Bought merchandise worth Purchases 20,000 Cash 20,000
    P20,000.00, Term: COD Cash 20,000 Sales 20,000
    2. Purchase of Merchandise, P20,000, Purchases 20,000 Accounts Receivable 20,000
    Term n/30 Accounts Payable 20,000 Sales 20,000
    3. Collection of account from Accounts Payable 20,000 Cash 20,000
    transaction no. 2 Cash 20,000 Accounts Receivable 20,000
    4. Bought merchandise worth Purchases 20,000 Accounts Receivable 20,000
    P20,0000. Terms 2/10,n/30 Accounts Payable 20,000 Sales 20,000
    5. Collection of account within Accounts Payable 20,000 Cash 19,600
    discount period Purchase discount 400 Sales discount 400
    Accounts Receivable 20,000
    Cash 19,600
    6. Collection of account beyond Accounts Payable 20,000 Cash 20,000
    discount period Cash 20,000 Accounts Receivable 20,000
    Sample Transaction with Returns

    Transaction BUYER’S Book SELLER’S Books


    7. Bought merchandise worth Purchases 20,000 Accounts Receivable 20,000
    P20,0000. Terms n/30 Accounts Payable 20,000 Sales 20,000
    8. Customer returned goods costing Accounts Payable 5,000 Sales Return 5,000
    P5000 for being defective. Purchase Return 5,000 Accounts Receivable 5,000
    9. Payment of the Balance Accounts Payable 15,000 Cash 15,000
    Cash 15,000 Accounts Receivable 15,000
    Sample Transaction with Down payment

    Transaction BUYER’S Book SELLER’S Books


    7. Bought merchandise worth Purchases 20,000 Accounts Receivable 10,000
    P20,0000. Terms 50% downpayment Cash 10,000 Cash 10,000
    and balance n/30 Accounts Payable 10,000 Sales 20,000
    9. Payment of the Balance Accounts Payable 10,000 Cash 10,000
    Cash 10,000 Accounts Receivable 10,000
    Guide for transactions with
    Transportation Costs

    Sellers Books Buyer’s Books

    FOB Shipping Point; Freight Accounts Receivable XX Freight – In XX


    Prepaid Cash XX Accounts Payable XX

    FOB Shipping point; Freight No Entry Freight – In XX


    Collect Cash XX

    FOB Destination Point; Freight Freight Out XX No Entry


    Prepaid Cash XX

    FOB Destination Point; Freight Freight Out XX Accounts Receivable XX


    Collect Accounts Payable XX Cash XX
    Sample Case: Provide for the Journal
    Entries

    ▪ Nov. 1 - Hi-tech purchased merchandise for 2,800 on credit


    terms 2/5, n/30, FOB Shipping point and paid for the
    transportation cost amounting to 160
    ▪ Nov. 3 - Hi tech discovers and returns 200 defective merchandise
    purchased on Nov. 1
    ▪ Nov. 5 - Hi tech pays cash for Nov. 1 purchase.
    ▪ Nov. 10 - Hi tech sells merchandise for P3000 on credit
    ▪ Nov. 16 - The customer returns merchandise from the Nov. 10
    transaction with a selling price of P400
    Click icon to add picture

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