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FOR
INVENTORY
Presented by
Sh Turab Haider
Inventory/ Stock
Inventory is finished goods a
company accumulates before
selling. It can also describe the
raw materials used to produce
the finished goods.
Summary of different accounts
Purchase account
Purchase account is in which inventory is
recorded when stock is purchased on cash so
we will
Dr the purchase account and
Cr the cash account.
Sale account for cash
Once the sales are made to customer it is known
as sales account. Sales account contain the
record of all sales transaction that may be cash
or credit sales so if the sale of inventory is on
cash then
Cr the sale account and
Dr the cash account
Sale account on credit
On 2 August 2012 good costing $310 are bought cash being paid for them
immediately at the time of purchase.
Purchase account
Date debit $
2 August 2012 Purchase account 310
Cash account
Date credit $
2 Augest 2012 Cash account 310
Purchases Cash
2012 $ 2012
Aug 2 cash 310 Aug 2 Purchases
Sales of inventory on credit example
Date Debit $
3 Augst 2012 J.Lee account 375
Date Credit $
Date debit $
4 August 2012 Cash account 55
Date credit $
4 August 2012 Sale account 55
Cash Sales
2012 $ 2012 $
4-Aug sales 55 4-Aug Cash 55
Return inwards example
On 5 August 2012 goods which had been previously sold to John for $29 are
now returned
Date Debit $
5 August 2012 Return inward 29
Date Credit $
On 6 August 2012 goods previuosly bought for $96 are returned by the
business to K.Howe
Date Debit $
Date Credit $
6 August 2012 Return Outwards 96
K.Howe Return outword
2012 $ 2012 $
Aug 6 K.Howe 96
Aug 6 return outward 96