INVENTORY ANALYSIS

Perpetual system.

Dt. Inventory
     Cr. Cash / AP

Dt. AR/ Cash
     Cr. Sales
Dt. COGS
     Cr. Inventory

Dt. AP
      Cr. Inventory

Dt. Sales
      Cr. AR
Dt. Inventory.
      Cr. COGS

Dt. AP
      Cr.cash
           Inventory

Dt. Cash
      Discount allowed
       Cr. AR

Periodic system

Dt. Purchases
      Cr. Cash / AP

Dt. AR/ Cash
     Cr. Sales

Dt. AP
      Cr. Purchases

Dt. Sales.
      Cr. AR

Dt. AP
      Cr.Cash
           Account received

Dt. Cash
      Discount allowed
       Cr. AR

Inventory

• Inventory is the name given to goods held for resale, work-in-progress and raw materials.
• There are several different ways to value inventory:

FIFO (first in, first out)
LIFO (last in, first out)
AVCO (average cost)