Task Team of FUNdaMENTAL aCCOUNtIng School of Business. Sun Yat-sen University y Accounting for sales transactions records sales, sales discount, sales returns and allowance. etc Y Under perpetual inventory system, adjustments must be made for shrinkage at the end of Closing entries transfer balances les. sales returns and allowance. sales discounts and cost of goods sold into income summary account Key Points 1. components of income for merchandising company 2. periodic vs. perpetual inventory system 3. merchandising purchase transactions 4. merchandising sales transactions Reading material 1. Larson, K D, T. Jensen, and R. Carroll, 2002, Fundamental Accounting Principle McGraw-Hill Ryerson 2. Libby, R, P.A. Libby, D.G. Short G. Kanaan, and M. Gowing, 2003, Financial Accounting McGra-Hill RyersonTask Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Yat-sen University 7  Accounting for sales transactions records sales, sales discount, sales returns and allowance, etc.  Under perpetual inventory system, adjustments must be made for shrinkage at the end of period. Closing entries transfer balances in sales, sales returns and allowance, sales discounts and cost of goods sold into income summary account. Key Points 1. components of income for merchandising company 2. periodic vs. perpetual inventory system 3. merchandising purchase transactions 4. merchandising sales transactions Reading material 1. Larson, K.D., T. Jensen, and R. Carroll, 2002, Fundamental Accounting Principles, McGraw-Hill Ryerson. 2. Libby, R., P.A. Libby, D.G. Short, G. Kanaan, and M. Gowing, 2003, Financial Accounting, McGraw-Hill Ryerson