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    jean3255's Avatar
    jean3255 Posts: 9, Reputation: 1
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    #1

    Sep 10, 2008, 04:41 PM
    Accounting entry
    $44,000.00 of inventory is exchanged for services rendered. $22,000.00 credit is issued to the company the inventory came from. The remainder $22,000.00 will be used as needed. I know you credit inventory for $44,000.00, but what are the other entries?
    MLSNC's Avatar
    MLSNC Posts: 158, Reputation: 17
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    #2

    Sep 10, 2008, 08:07 PM
    If you are crediting inventory, you would need to debit cost of goods sold.

    You would also need to record a sale(cr) for 44,000, an expense to the proper expense line (dr) for 22,000 with another dr to Accts Receivable for the balance not used of 22,000.
    jean3255's Avatar
    jean3255 Posts: 9, Reputation: 1
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    #3

    Sep 11, 2008, 07:11 AM
    Why would you debit cogs? You did that when you purchased the inventory.
    AdamUTsel's Avatar
    AdamUTsel Posts: 100, Reputation: 2
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    #4

    Sep 12, 2008, 09:02 AM
    Quote Originally Posted by jean3255
    Why would you debit cogs? You did that when you purchased the inventory.

    You only charge cost of goods sold when you SELL the inventory. When inventory is purchased, you debit inventory and credit A/P or Cash depending on how the purchase was made.
    AdamUTsel's Avatar
    AdamUTsel Posts: 100, Reputation: 2
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    #5

    Sep 12, 2008, 09:04 AM
    Of course, the entries can vary a little depending on whether your inventory is recorded using the perpetual or periodic methods.
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