| BPS Examples: Accrual accounting | Ticket Zero Partial Payment (Cash Basis) | Ticket Zero Final Payment | |||||||
| Account description | Debit | Credit | Debit | Credit | Debit | Credit | |||
| Accounts Receivable | $ 535.00 | ||||||||
| Cash | $ 500.00 | $ 500.00 | $ 535.00 | ||||||
| Sales Tax Payable | $ 35.00 | $ 35.00 | |||||||
| Bridal Sales | $ 1,000.00 | $ 1,000.00 | |||||||
| Deposits (liability) + | $ 500.00 | $ 535.00 | |||||||
| Less Deposits Released - | $ 1,035.00 | ||||||||
| Net Deposit Change | $ (500.00) | ||||||||
| Total | $ 1,035.00 | $ 1,035.00 | $ 500.00 | $ 500.00 | $ 535.00 | $ 535.00 | |||
| Additional Postings | |||||||||
| Cost of Sales Purchases-special order | $ 500.00 | $ 500.00 | |||||||
| Accounts Payable | $ 500.00 | $ 500.00 | |||||||
| Record accounts payable | |||||||||
| when purchase order is placed | |||||||||
| Inventory | $ 500.00 | $ 500.00 | |||||||
| Purchases | $ 500.00 | $ 500.00 | |||||||
| Accounts payable | $ 500.00 | $ 500.00 | |||||||
| Cash | $ 500.00 | $ 500.00 | |||||||
| Place gown in inventory when | |||||||||
| merchandise is received | |||||||||
| Cash | $ 535.00 | ||||||||
| Accounts Receivable | $ 535.00 | ||||||||
| Balance on gown is paid | |||||||||
| Accural Notes: | |||||||||
| There is a problem when the inventory ledger balance is reduced before | |||||||||
| the gown is received. On an accrual basis, the balance in the Purchases account for | |||||||||
| special order merchandise should reflect the inventory outstanding. | |||||||||
| The simplest way to keep up with this would be to have a separate Purchases account | |||||||||
| for Special Order merchandise. The balance in this account should be added to the | |||||||||
| Inventory ledger balance | |||||||||
| This is not a issue for stock orders | |||||||||
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