Rajiv, Co., had inventory and accounts payable of $110,000 on December 31, 20X7. Data for 20X8 follow:

Question:

Gross purchases on account .........$980,000

Cost of goods sold ............. 920,000

Inventory, December 31, 20X8 ......... 100,000

Purchase returns and allowances ....... 70,000

By using the data, prepare comparative journal entries, including closing entries, for both a perpetual and a periodic inventory system.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...