ACCOUNTING FOR MERCHANDISING BUSINESS

• perpetual inventory


  provides a running balance of the cost of goods sold available for sale and the cost of goods sold
• periodic inventory


  the inventory account is not updated for each purchase and sale
• posting on special journals

  sales journal - all credit transactions with customers are recorded

  purchases journal - all credit purchases of merchandise are recorded in the purchases journal

  cash receipts journal - multi-column cash receipts journal records cash-generating transactions

  cash disbursements journal - the cash disbursements journal records cash-depleting transactions