Periodic Inventory System Journal Entries

The periodic inventory system journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting under a periodic inventory system.

In each case the periodic inventory system journal entries show the debit and credit account together with a brief narrative. For a fuller explanation of journal entries, view our examples section.

Typical Periodic Inventory System Journal Entries

To purchase goods from a supplier using periodic inventory system journal entries
Account Debit Credit
Purchases XXX
Accounts payable XXX
To record a supplier purchase cash settlement discount
Account Debit Credit
Accounts payable XXX
Purchase discounts XXX
Cash XXX
To record freight costs (shipping point)
Account Debit Credit
Freight-In XXX
Accounts payable XXX
To record a purchase return to a supplier using periodic inventory system journal entries
Account Debit Credit
Accounts payable XXX
Purchase returns and allowances XXX
To record the sale of goods to a customer using periodic inventory system journal entries
Account Debit Credit
Accounts receivable XXX
Sales XXX
To record a sales return from a customer using periodic inventory system journal entries
Account Debit Credit
Sales returns XXX
Accounts receivable XXX
To record a customer sale cash settlement discount
Account Debit Credit
Cash XXX
Sales discount XXX
Accounts receivable XXX
To record a physical inventory count shortage
Account Debit Credit
Loss on inventory write down XXX
Inventory XXX
To record end of period journal entries using periodic inventory system
Account Debit Credit
Cost of goods sold XXX
Inventory (Beginning) XXX
Cost of goods sold XXX
Inventory (Ending) XXX

Periodic vs Perpetual Inventory System Journal Entries

This reference guide is for the periodic inventory system, if the business is using a perpetual inventory system the journal entries are different and can be seen in our perpetual inventory system journal entries reference guide.

perpetual v periodic v 1.0
Periodic vs Perpetual Inventory System Journal Entries

The periodic vs perpetual inventory system journal entries diagram used in this tutorial is available for download in PDF format by following the link below.

Periodic vs Perpetual Inventory System Journal Entry Comparison PDF Download Link
Last modified April 20th, 2019 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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Posted By: Michael Brown
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