Accounting for Beginners #41 / Perpetual Inventory Vs. Periodic Inventory/ Asset / Journal Entry

Accounting for Beginners #41 / Perpetual Inventory Vs. Periodic Inventory/ Asset / Journal Entry

yo yo yo what’s good family my AFB family
my DC ADE LER crew this is CP a strength I am the strongest elation CPA in the
state of Florida welcome back if you want to see the best accounting playlist
in the world when a Google car brain here you can go there you can learn to
do accounting you can pass your classes you can get your degree you can make big
money you can be a super popular accountant get all the ladies or all the
guys either ones fine what we’re going to do is a what seek a strength see past
Rizal’s what you’re going to do today I’m going to do inventory counting for
beginners number 41 that’s what we’re going to do is there 41 it’s right after
40 and we’re going to do inventory forty and forty which is we started inventory
we made a purchase we started in red where it’s an asset we bought one widget
in 40 and in 40 41 the inventory it’s going to be the difference between hold
on II I’m back live jump cutter it’s going to be this 41 inventory difference
between perpetual inventory versus periodic inventory now will tell what
kind of my definition I thought hey if you want the book definition you can
just google search the definition of these so let me give you kind of my
definition of these you’re either you have inventory and you want to sell you
want to sell some of your inventory you’re going to sell it either going
perpetual inventory or using periodic inventory perpetual inventory
the reflectional inventory II that’s perpetual perpetual perpetual perpetual
it’s like keeps on going a perpetuity annuity it just it keeps on going you
keep up you keep up with it you keep up with it perpetually going and the
perpetual one is where you always keep track of the amount available for sale
and the amount sold every sale so you keep on going you keep on going now I
say with the way you know computers are in technology that I would have to
assume that most bigger corporations use a perpetual inventory with the computers
and such like that because it would be easy to keep up with your inventory i or
or or you can do periodic inventory once you figure out at certain times so you
just figure out at you don’t you don’t keep up with it
perpetually every every time you make a transaction keep up the inventory you
periodically do that certain times certain times for inventory if you don’t
know like I guess the definition of or you don’t know like I’m telling you this
and you’re like what what the f but you don’t really you don’t know perpetual
means ongoing and periodic means certain times so we’re talking about inventory
so like if you know that then you’re gonna you don’t have to row you don’t
have to write it on on your paper every morning with DCL or I’m sorry and go
over GC lips this is your first time I’m sorry but this is my mapping system and
it’s a debit credit asset or expense level every revenue is the mapping
system to keep everything straight inventories an asset that’s for awhile
so you’re going to write down your paper every morning regardless if you know
you’re just going to do that and you’re going to write other stuff every morning
and you know stuff that you can’t remember so you get an inventory so when
you’re doing your homework and you get an inventory problem so you can’t
remember this but in the morning you’ve been writing perpetual inventory um you
know keep track keep track all the time periodic inventory keep track certain
times so you wrote that you’re like him and can’t remember behaviors or
questions so you look at your sheet and then that helps with the answer and
after a couple more times you’re like I don’t need this extra sheet you know I
know what the difference between perpetual and periodic is so I guess
it’s kind of like a laugh now laugh now cry later think you’re going to put in
some more time and figure out your inventory currently or are you gonna you
know not take the time now and you’re going to take it and you’re going to
figure anything out later let’s jump in I want to do one more thing when you’re
selling when you’re selling when you’re selling widgets I know I wanted a widget
right last time but anyways this is the only thing our company sells is their
only inventories widgets as the widget we buy these for five hundred and we
sell for a thousand 500 sell high debt that they did right we get these widgets
from a different different manufacturers we get home sometimes and big bulk amounts sometimes
we get them in smaller amounts sometimes so I mean if you buy a big shipment it
costs more money I’m just trying to get sometimes inflation I’m just trying to
say that this is all we buy and sell as these widgets so they’re not always
they’re not always going to be $500 sometimes they’re going to be you know
we buy a thousand of them they’re going to be 482 Peaks 480 dollars a piece
sometimes maybe there’s a drought maybe you know maybe like the plugs dry gotta
go a different plug and you know I’m saying he’s sitting on he sit on these
widgets during the drought so my dogs to get them for five all day long he’s a
yellow 50 player I’m like now take your leave at Hoani so what I’m saying is
these are widgets are not going to cost the same every time
so in accounting we’re going to get into this your ears are going to value how
much you’re going to value how much each widget each widget costs you by FIFO
LIFO or weighted average because they all don’t bail them they’ll don’t cost
the same for in our per for in our example right now we’ve only we only
bought one we only bought one widget for five hundred dollars so that’s that’s
how much per widget we either you know FIFO LIFO or weighted average at
something there’s only one so it cost five hundred so that’s how much the as
much they cost let’s say hey we’re going to we’re going to sell we’re going to
find itself we’re going to sell our widget for $1000 we’re finally going to
sell this widget for $1000 if you do the perpetual if you do the perpetual
inventory method here is we sold one solar widget by 1 cell 1 by 1 cell 1 e
if you got to that if you sold it and our perpetual from keeping up with
everything there’s going to be 2 C lat there’s more now upfront there’s two two
journal entries for a sale or perpetual now you got $1,000 chippers so you so
you know you know that you know caching it with our cache caches and that’s how
we’re in debit that four thousand dollars we’re going to credit a thousand
dollars now what did we get what did we get the cash for we sold we sold a
widget for a thousand dollars but now this is the perpetual method so you know
perpetual we keep up you keep track of the inventory at all times okay we just
sold we just sold a widget are we keeping track of inventory with this no
because on our books we still have a widget for five hundred dollars so we
need to get rid of this if we’re going to perpetual and keeping track of the
inventory as we’re going we need to get rid of this inventory so that’s going to
be our credit because inventory is an asset we’re lowering the amount of
inventory because we’ve sold it so we’re lowering inventory if inventory is a
debit in the positive going up it’s going to be a credit going down so
that’s why our credit is over here inventory credit of five hundred dollars
that is in our that is our expense in our perpetual system and that is going
to be our debit because that’s how much the inventory cost us yoyoyo
I just lost my train of thought on cost of goods sold they’re back at a few
hours later I think I just want to say the cost of goods sold is the expense
it’s the debit when you have a credit of inventory when in your journal entry
when you’re doing perpetual and you want to keep up with everything I think just
for now you’re going to have to know that and if you had if you’re if you’re
taking the inventory off the books you know as a transaction to happen like in
a perpetual system then is a corresponding debit to that is
going to be a cost of goods sold and as its as it sounds it’s the cost of the
goods sold you guys you guys think that keeps everything this is the journal
entry for the perpetual if we sold one you see you have two journal entries
because you’re keeping up with it now you have the cost of goods sold
you’ve got the inventory now if you had if you had a periodic if you’re doing a
periodic you’re just going to do it certain you’re just going to keep track
at certain times of the inventory this is just going to be your journal entry
for when you sold you’re going to have you know hey I got a thousand dollars
cash that’s my debit I sold it for I what do you do I sold a Wigner four
thousand dollars so you can keep track like that and then at the right at the
end of the year you’re going to back that thing up back that thing up like
you’re playing the juvie or it’s like the political plug call me
the socket on the plugs plug anyways they call it a plug and that’s what just
you’re going to have you have beginning inventory plus purchases equals
available for sales minus units sold equals your every ending inventory so
this is kind of the plug that you would do for periodic inventory thank you very
much for watching if you made it this far you must have liked it at some
regard please give it a like please give this video a like it really helps to
spread these videos out to a wider audience and who doesn’t need to know
accounting this is so much fun am i right
Oh leave a comment to subscribe if you don’t we just hit 20k I’m going for 100k
it’s Tuesday today this is going to be Wednesday’s video let’s go

39 thoughts on “Accounting for Beginners #41 / Perpetual Inventory Vs. Periodic Inventory/ Asset / Journal Entry

  1. If I'm training to be an accountant should I master booking keeping first, or just jump right into double entry accounting books?

  2. Great video. Thank you for your time and effort to educate us. Always like your cool way of teaching. Yo Yo Yo πŸ’ͺπŸ‘βœŒ

  3. Thanks for the video. πŸ™‚ Your videos always help me understand things a little better than I did before.

  4. thank you for all the videos, I am a studying Bookkeeping as distance leaner your videos are very helpful. thank you

  5. dcadeler. Nice. You're a very great teacher. 41 videos is a lot but I had fun. It's a great way to review those accounting lessons. Thanks a lot. More powers.

  6. Hi JD! Sorry, I got stuck on what the Perpetual Debit Cost of Goods Sold was – is it a Debit Asset or it sounded like you said it was a Debit Expense? Isn't an Expense "money spent in hopes of making money for your business"? Confusing… Thanks!

  7. hey I'd I'm back! family member has cancer and needed emergency surgery. your videos are still very informative and lately a great distraction.

  8. I saw the whole 41 videos till right now, I can't explain how much this has helped me learning new stuff. I'm aiming to be an entrepreneur and i want to able to most of the basics by myself and your videos are helping me learn how to sort things and know where every item should be/go. I stopped taking notes at the 35th video because I decided to just watch and learn for now then read a book and come back to your channel for some help with the over all thought on the topic. And honestly you're such a great teacher and every time you say something about things being out of order I just keep on wanting to say: better late than never. and as long that you make the video people have the ability to view things in the order they like. Thank you again for these amazing videos and I have shared them with some friends to watch and recommend to others.

  9. I have to admit that I did not find this easy as your other videos. I hope it becomes clearer when watching your next video. Thank you for taking time out to do this

  10. So I think I understand this but in the perpetual inventory it says cash $1,000 and sales $1,000. Under purchase you have inventory $500 and cash $500. The inventory money goes to sales? I'm just slightly confused because you use the same amount of cash in each "slot"..I guess I would call it

  11. when you get a chance can you make a video on multistep income statement and computing the cost of goods
    thanks man

  12. Still loving these videos..still loving you. You've inspired me CPA to create my own channel:

  13. I am emailing you I need little more on periodic inventory method! it's 10:57pm so you are probably finishing dinner. S…T…A…Y A…..W..A.K…E A-Okay:)

  14. question, please. when you purchased the item, JE was DR: INV CR: CASH? When you sold it, JE was DR: CASH CR: REV. DR: EXPENSE CR: INV? So at the end after you cancel each others out, it's DR: EXP (COGS) CR: REV??? that seems odd…

  15. Your 10 minute free videos teach me more than my thousand dollar 3 hour lectures at university does , wouldn’t have passed my last exam without these!

  16. which accounts between cost of goods sold and income summary would appear on a worksheet for a merchandising entity that uses the perpetual inventory system?

  17. Thank you, reading my accounting book then going over the video series to strengthen the concept. BOMB!!!😁

  18. I took a job as a Full Charge Bookkeeper with the understanding that I would be trained. But I am having to train myself because the owners don't have a clue how to keep books or what they are actually doing sales & cost wise. You are my teacher and you are amazing! YOU make ME look smart AND capable! Thank you so much for all you do for us! Yo yo yo! CPA STRENGTH FOREVAH!

Leave a Reply

Your email address will not be published. Required fields are marked *