MANAGEMENT

Detailed explanation-1: -Record the purchase returns by debiting the accounts payable or accounts receivable account and crediting the purchase returns account. Record inventory sales by crediting the accounts receivable account and crediting the sales account.

Detailed explanation-2: -Remember, we do not record sales transactions using either merchandise inventory or cost of goods sold expense account under the periodic inventory method. Instead, cost of goods sold is calculated at the end of the period and recorded in an adjusting journal entry.

Detailed explanation-3: -Under the periodic inventory system, all purchases made between physical inventory counts are recorded in a purchases account. When a physical inventory count is done, the balance in the purchases account is then shifted into the inventory account, which in turn is adjusted to match the cost of the ending inventory.

Detailed explanation-4: -Assuming that the amount of the physical count of the stock of merchandise is less than the recorded amount, the adjusting entry is a debit to Cost of Goods Sold and a credit to Merchandise Inventory for the amount of the difference.

Detailed explanation-5: -Record your sales return by debiting your sales returns account and crediting your accounts receivable or accounts payable. Complete the closing entry at the end of the accounting period, after the physical count.