There are two common methods of recording inventories or stocks in the General Ledger of business entities:- 1. The Periodic Method 2. The Perpetual Method The choice of the method used will directly determine the double entries for the recording of inventorie...
Inventories or stocks are one type of assets to many business entities. Inventories or stocks could be in the form of trading goods/merchandise for those business entities principally engaged in purchasing the goods from suppliers and resell those goods to ...
Remember in my previous post on the Balance Sheet? The Balance Sheet shows the “position” of an entity at a certain point in time. However, the Income Statement shows a different picture than the Balance Sheet – Income Statement or Profit and Loss...
As discussed in my earlier posts, the balance sheet shows the financial position of an entity. In addition to the example introduced earlier whereby the owner contributed $10,000 cash at bank as capital (please refer to my post titled Debits and Credits), t...
These two words are typical to the world of accounting and they relate to the Accounting Equation: – Assets = Liabilities + Owners’ Equity Under what we called double entry system in accounting, each transaction must be recorded TWO times. For ...