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Ch. 4 - Merchandising OperationsWorksheetSee all chapters
All Chapters
Ch. 1 - Introduction to Accounting
Ch. 2 - Transaction Analysis
Ch. 3 - Accrual Accounting Concepts
Ch. 4 - Merchandising Operations
Ch. 5 - Inventory
Ch. 6 - Internal Controls and Reporting Cash
Ch. 7 - Receivables and Investments
Ch. 8 - Long Lived Assets
Ch. 9 - Current Liabilities
Ch. 10 - Time Value of Money
Ch. 11 - Long Term Liabilities
Ch. 12 - Stockholders' Equity
Ch. 13 - Statement of Cash Flows
Ch. 14 - Financial Statement Analysis
Ch. 15 - GAAP vs IFRS
In a periodic system, purchasing activities are kept in accounts separate from the main Inventory account.

Concept #1: Periodic Inventory: Purchases

Concept #2: Periodic Inventory: Purchase Returns

Concept #3: Periodic Inventory: Purchase Allowance

Practice: Never Satisfied Incorporated (NSI) purchased 400 units of High Quality Goods for $300,000 on account. After inspecting the goods, they decided that 300 units did not meet their standards and NSI received a refund for these goods. If NSI uses a periodic inventory system, the entry to record the return of goods would include: