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Lecture Documents Accounting - Methods OF Recording Receivables

Lecture Documents Accounting - Methods OF Recording Receivables
Course

Intro To Accounting (AC 210)

316 Documents
Students shared 316 documents in this course
Academic year: 2021/2022
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METHODS OF RECORDING RECEIVABLES

The company's inventory is recorded and recognized at the purchase price, not the selling price. The purchase price is the price listed on the purchase invoice. If in the purchase transaction there are additional expenses such as purchase freight, it will be recorded in a separate account, namely the purchase freight account. If in the purchase transaction the company obtains a purchase discount, it must be recorded in a separate account, the purchase discount account. Although these accounts will eventually be summed when calculating the cost of goods sold, but basically the inventory of merchandise must be recorded at the purchase price. In general, there are two methods that are used to calculate and record inventories related to the calculation of cost of goods sold: physical method physical method or also called the periodic method is a method of inventory management, where the outflow of goods is not recorded in detail so that to determine the value of inventory at a certain moment must do Peng count of physical goods (stock opname) in the warehouse. The use of physical methods requires accounting for existing (remaining) goods at the end of the accounting period when compiling financial statements. - Initial inventory of goods xxx-purchase xxxx-total inventory xxxxx-final inventory (xx) - cost of goods sold xxx cost of goods sold is the purchase price or total cost of production of a number of goods that have been sold in a given period. To determine the cost of goods sold in a given period, it must be known the volume and value of final inventory in that period. And to know the value of the final inventory, must be calculated physically (stock-

opname) in the warehouse. This method is more suitable in use by companies whose transaction frequency is high and the value of money per transaction is low, such as in retail companies. As previously explained, to determine the cost of goods sold by a company using the periodic method, the physical calculation of its inventory must be done. In the calculation of physical (stock opname) inventory, must be determined the amount of inventory that the company has for sure. After knowing the volume of supply, the number of goods multiplied by the purchase price per unit of trade. The problem is, if the purchase price of goods is different from one another, then the company has the option to use several different purchase prices. To determine the purchase price as the basis for determining the value of inventory owned by the company in a period, there are several methods, namely: 1. FIFO (First In First Out) in this method, the goods that enter (bought or produced) first will be issued (sold) first, so that what remains at the end of the period is the goods that come from the last purchase or production. For example, PT. Niaga Jaya is a distributor of microwave brand "Hotmix" located in Jakarta. During the month of January 2012, the company's data relating to microwave inventories are as follows: Date description Volume Price / Unit value-January 1, 2012-January 12, 2012 inventory purchase 250 units 300 units 550 600. 137.500 180.000 - 21 January 2012 purchase of 300 units 640, 224,000,000 - January 31, 2012 purchase of 100 units 675,000 67,500,000 Total 1,000 units 609,000,000 during January 2012, the company sold 700 microwave units to its customers in cash at a selling price of Rp900, 000 per unit, and the company did not record the entry and exit of these items in detail. At the end of

purchase price of micro-wave used is the initial price, which is as many as 250 units using the price of Rp550, 000 per unit and as many as 50 units using the price of Rp600, 000 per unit. So, the value is: - 250 units @ Rp550 = 137,500,000 - 50 units @ Rp600 = 30,000,000 - Total Rp 167,500, because the results of stock opname shows the value of inventory at the end of January 2012 as many as 300 units worth Rp. 167.500, the cost of goods sold (BPP) in January 2012 was Rp. 441,500,000 calculated as follows: - inventories, initial (January 1, 2012) 137,500,000 - purchases 471,500,000 - total inventories 609,000,000 - final inventories (January 31, 2012) (167,500,000) - cost of goods sold 441,500,000 IFRS does not allow the use of the LIFO method in recording inventories. But in this book, LIFO method is still presented to the needs of the learning process to the readers, so that readers still understand the method of recording and calculating BPP with LIFO method. However, at the same time the reader also knows that the method is not allowed to be used. 3. Average (Average) in this method of goods issued/sold

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Lecture Documents Accounting - Methods OF Recording Receivables

Course: Intro To Accounting (AC 210)

316 Documents
Students shared 316 documents in this course

University: University of Alabama

Was this document helpful?
METHODS OF RECORDING RECEIVABLES
The company's inventory is recorded and recognized at the purchase price, not the
selling price. The purchase price is the price listed on the purchase invoice. If in
the purchase transaction there are additional expenses such as purchase freight, it
will be recorded in a separate account, namely the purchase freight account. If in
the purchase transaction the company obtains a purchase discount, it must be
recorded in a separate account, the purchase discount account. Although these
accounts will eventually be summed when calculating the cost of goods sold, but
basically the inventory of merchandise must be recorded at the purchase price. In
general, there are two methods that are used to calculate and record inventories
related to the calculation of cost of goods sold: physical method physical method
or also called the periodic method is a method of inventory management, where
the outflow of goods is not recorded in detail so that to determine the value of
inventory at a certain moment must do Peng count of physical goods (stock
opname) in the warehouse. The use of physical methods requires accounting for
existing (remaining) goods at the end of the accounting period when compiling
financial statements. - Initial inventory of goods xxx-purchase xxxx-total
inventory xxxxx-final inventory (xx) - cost of goods sold xxx cost of goods sold is
the purchase price or total cost of production of a number of goods that have been
sold in a given period. To determine the cost of goods sold in a given period, it
must be known the volume and value of final inventory in that period. And to
know the value of the final inventory, must be calculated physically (stock-

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