Perpetual Accounting

Vendor gives allowance

Debit AP, Credit Inventory

Deliver product to customer who buys on account

Debit AR, Credit Sales Debit CGS, Credit Inventory When customer pays: Debit Cash, Debit SD, Credit AR

Take delivery from vendor for product 2/10 net 30

Debit Inventory, Credit AP When company pays vendor within discount period: Debit AP, Credit Cash, Credit Inventory

Company pays freight in

Debit Inventory, Credit Cash

Customer returns product

Debit SRA, Credit AR Debit Inventory, Credit CGS