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Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory definitions

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Termini in questo insieme (15)

  • Perpetual Inventory System
    Accounting method that updates inventory and cost of goods sold accounts immediately after each sale using real-time data.
  • Periodic Inventory System
    Inventory method that updates inventory and calculates cost of goods sold only at the end of the accounting period.
  • Cost of Goods Sold
    Expense representing the direct cost to acquire or produce items sold during a specific period.
  • Revenue Entry
    Journal entry recording the income received from sales, typically involving a debit to cash and a credit to revenue.
  • Inventory Account
    Asset account tracking the value of goods held for sale by a business at any given time.
  • T Account
    Visual tool used in accounting to represent debits and credits for a particular account, aiding in calculations.
  • Beginning Inventory
    Value of inventory a company has on hand at the start of an accounting period.
  • Purchases
    Additions to inventory during an accounting period, increasing the inventory account balance.
  • Ending Inventory
    Value of inventory remaining unsold at the end of an accounting period, often determined by physical count.
  • Expense Account
    Account type used to record costs incurred by a business, such as cost of goods sold, reducing equity.
  • Accounting Equation
    Fundamental relationship: Assets = Liabilities + Equity, maintained through all accounting entries.
  • Physical Count
    Process of manually counting inventory items to determine the actual quantity on hand at period end.
  • Debit
    Accounting entry that increases asset or expense accounts and decreases liability, equity, or revenue accounts.
  • Credit
    Accounting entry that increases liability, equity, or revenue accounts and decreases asset or expense accounts.
  • Asset
    Resource owned by a business, such as cash or inventory, expected to provide future economic benefit.