Vol. 2 of Basic Accounting Concepts, Principles, & Procedures: Worthy & James Publishing

The Operating Cycles Compared    316
Terminology of Income Calculations    318
Income Calculation and Reporting    320
Cost of Goods Sold    321
Quick Comparison of Periodic and Perpetual    323
How Do I Know Which Kind of Problem It Is?    324
Review and Vocabulary    325
Practice    326

Learning Goal 19:

Explain How Sales Are Recorded
and Reported 329

Net Sales    329
When to Record Revenue    329
Overview of Net Sales    331
Sales Discounts    332
Credit Terms    333
Calculating Discounts    334
Journalizing Payments from Customers    337
Calculating and Recording Sales Returns and
Allowances    342
Shipping Charges and Sales Tax    344
Shipping Charges Paid by the Seller    344
Sales Tax    345
Review    347
Vocabulary    348
Practice    349

Learning Goal 20:

Explain and Use the Periodic
Inventory Method 356

Overview    356
The Cost of Goods Sold Formula    358
Overview of Income Calculation    358
Formula for Cost of Goods Sold Calculation    359
Cost of Goods Available for Sale 362
Overview    362
Beginning Inventory    363
Purchases    364
How Purchases Are Made    366
Purchase Discounts    366
Calculating Purchase Discounts    367
Journalizing Payments to the Sellers    368
Purchase Returns and Allowances    370
Freight-in    372
Summary Illustration: Cost of Goods Available and
Cost of Goods Purchased    375
Comparison Table—Seller and Buyer Journal
Entries    376

Ending Inventory    377
Description    377
How to Calculate Ending Inventory    377
How to Report Ending Inventory    378
Review    380
Vocabulary    381
Practice    382

Learning Goal 21:

Complete the Period-End
Procedures—Periodic Method 389

Overview    389
Period-End Procedures: Closing System    390
Completing the Worksheet: Closing System    390
Financial Statements    401
Recording Adjusting and Closing Entries: Closing
System    405
Period-End Procedures: Adjusting System    409
Overview    409
Completing the Worksheet: Adjusting System    409
Financial Statements    418
Recording Adjusting and Closing Entries: Adjusting
System    421
The Gross Profit Percentage    425
Review and Vocabulary    426
Practice    427
Cumulative Vocabulary Review    437
Cumulative Test    439
Cumulative Test Solutions    446
Help Table    447

Learning Goal 22:

Explain and Use the Perpetual
Inventory Method 448

Overview    448
The Cost of Goods Sold Calculation    450
Overview    450
Optional Formula    451
Transactions That Involve Buying Merchandise    452
Purchases    452
Purchase Discounts    452
Calculating Discounts    453
Journalizing Payments for Purchases and
Discounts    453
Journalizing Purchase Returns and Allowances    454
Journalizing Freight Costs    457
Summary of the Merchandise Inventory Account    459
Alternative Method for Discounts, Returns,
Allowances, and Freight    460

Contents

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Worthy & James Publishing is a provider of basic accounting books covering fundamental accounting principles, business accounting, and business math. Topics in financial accounting and business accounting covered include the balance sheet, the income statement, financial ratios, and bank reconciliation.