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Accounting And Inventory Essay

929 words - 4 pages

For this assignment week three Financial Accounting course, our class has been tasked with using what we have learned thus-far. Once we have created this spreadsheet we will apply the skills we have learned by applying what we know in this financial spreadsheet. This spreadsheet will be capable of tracking and accounting many different aspects of business transaction. As an example, there will be several types of transaction, but for example, the financial spreadsheet that will account for items such as for financial gains, accounts payable, and several types of financial adjustments to inventory.
The examples in our textbook generalized the types of gains and losses we are to ...view middle of the document...

The primary focus of this assignment was to be able to create a financial statement or document that a business might use to account for losses, damaged goods, and stolen inventory. With regards to merchandising businesses and how they receive defective products, the procedure would be best described as what I have read on “Chron”, it stated that “Merchandising business may, from time to time, receive merchandise inventory that is defective and is placed for sale on the sales floor. If a customer purchases a defective item from a merchandising business and returns it for a refund of the purchase price, the store receives the item back, but it is not placed back into inventory. The store must return the item to its supplier in return for a debit memorandum, or debit memo, which reduces the amount due to that company on a future invoice.”
When it comes to goods sold those items are viewed as the cost of all purchases allocated between the cost of goods sold and inventory. But unfortunately not every customer keeps all their merchandise that have purchased. So as we look forward and deal those situations accordingly. With items returned by customers, we will follow the correct procedures and put the material put back into your on-hand inventory. First, it would be the buyer that must record a returned purchase. This is accomplished by the inventory being credited to the Inventory account for the net cost of the returned merchandise. The next step in the process would be to record a sales return, in the the seller would be require to make two actions. Those actions would be to create a debit sales return for the amount of the refund Next the seller would then transfer the cost of the merchandise being returned from some sort of “Goods Sold” account and put the...

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