Journalize the transactions in a general journal using the periodic inventory method. If an amount box does not require an entry, leave it blank
To journalize transactions using the periodic inventory method, follow these steps:
1. Identify the transactions: Review the business activities and identify the transactions that need to be recorded in the general journal. Transactions usually involve the buying and selling of merchandise.
2. Determine the accounts affected: For each transaction, determine the accounts that are impacted. This typically includes accounts like Cash, Accounts Payable, Sales Revenue, Cost of Goods Sold, and Inventory.
3. Assign appropriate account numbers: If your company uses account numbers, assign the appropriate numbers to each account. This step helps maintain consistency and organization in the general journal.
4. Record the transactions: Take each transaction and record it in the general journal using the following format:
Date | Account | Account | Debit | Credit
In the "Account" column, write the account being debited or credited. If an amount box does not require an entry, leave it blank.
5. Calculate and record the amounts: Determine the appropriate amounts for each account based on the transaction. Debits should be recorded on the left side (Dr) of the account, while credits should be recorded on the right side (Cr).
6. Balance the journal entry: Ensure that the total debits equal the total credits. If they don't, review your entries and correct any errors.
Remember that in the periodic inventory method, the cost of goods sold is not updated after each sale. Instead, it is calculated at the end of the accounting period based on the beginning inventory, purchases, and ending inventory.
By following these steps, you can properly journalize transactions using the periodic inventory method.