Double Entry on Assets

Double Entry on Assets

Define Inventory

Explain the transactions involved with inventory

Open Ended

What do you think Inventory is?

Give one example of inventory

What is inventory?

Inventory are described as unsold goods, this inventory of goods is constantly changing because during the course of the business and its activities more will be bought, some will be sold and others are returned. While this asset is always fluctuating it is important to keep record of the different accounts related to it in order to properly account for its change.

Examples of Inventory

• Inventory flows in the business

• Inventory can also flow out of the business

Open Ended

What are some transactions/activities that may occur in a business?

Transactions for the Asset of Inventory

• Purchases- goods purchased by the firm for the prime purpose of resale. Purchases can be applied to other accounts however the important aspect of purchases for inventory is that it must be bought for the purpose of selling over

• Sales- the sale of those goods in which the firm normally deals and which were bought with the prime intention of resale. “Sales” cannot be considered with the disposal of either items or else it would confuse the transactions under the asset of inventory specifically.

Return Inwards

Return Outwards