Accounting for

Merchandising
Business
 What is Merchandise

Merchandise - refers to an item

bought by a business for the purpose
of reselling it. It is referred to as
goods.
Merchandise that remains unsold at
the end of accounting period is called
Merchandise inventory or stocks.
 MERCHANDISING OPERATING CYCLE

BUY MERCHANDISE

COLLECT CUSTOMER
SELL MERCHANDISE
ACCOUNTS

BILL CUSTOMERS
 Merchandising Business

● A merchandising business is a type of commercial enterprise

that primarily sells tangible goods to customers for a profit.
Unlike service-oriented businesses that offer intangible
services, merchandising businesses focus on the sale of
products. These goods can vary widely, ranging from
everyday consumer items like clothing, electronics, and
groceries to specialized products such as machinery or
automotive parts.

● In a merchandising business, the primary goal is to

purchase goods from suppliers or manufacturers at a
wholesale price and then resell them to customers at a higher
retail price, thereby generating revenue and profit. The
success of a merchandising business often hinges on factors
such as inventory management, pricing strategies, customer
service, and effective marketing.
Types of Merchandising
Business
1. Retail Merchandising: Retail merchandising
involves selling goods directly to consumers
through physical storefronts, online platforms, or a
combination of both. Retailers typically purchase
goods in bulk from wholesalers or manufacturers,
mark up prices to cover expenses and profit
margins, and then sell them to individual
customers.
Example: A clothing store creates a special display for the
upcoming holiday season,.
Types of Merchandising
Business
2. Wholesale Merchandising: Wholesale
merchandising involves selling goods in large
quantities to other businesses, rather than directly to
consumers. Wholesale merchants often supply
retailers, distributors, or other businesses that require
products for resale. They typically offer lower prices
per unit compared to retail prices, as they sell in bulk.
Example:wholesale distributor of electronics supplies bulk
quantities of products like computer components, cables, and

accessories to retailers .
Account Titles

1. Merchandise Inventory Beginning

It refers to merchandise that remains unsold from
the previous accounting period and is expected to be
sold this period.
If sold within the previous accounting period,
beginning merchandise inventory forms part of cost
of goods sold in the income statement.
Cost of good sold or cost of
sales
- is the amount of merchandise sold by
the business for a given period of time.
It is computed by adding the net cost of
purchases to beginning inventory to get
the cost of goods available from which
the ending inventory is deducted from.
Net cost of purchases
– is the total amount
of merchandise bought
including shipping
costs, but net of
returns and discounts.

Cost of goods available for sale - refers to

total amount of merchandise that the
business can sell to its customers for a
given period of time.
 Transaction in a Merchandising
Business
1. Purchase of merchandise/inventory - in order to generate
revenue in a merchandising business, the business must
be able to sell its merchandise.
When the business purchases inventory from suppliers or
manufacturers, it records the transaction by debiting the inventory
account and crediting the accounts payable account (if purchased or
credit) or cash account (if purchased for cash).

In accounting, to purchase means to buy. In

merchandising business there are two systems
of maintaining inventory. These are the periodic
and the perpetual inventory systems.
 a. Periodic inventory system

is traditionally used by businesses selling many inexpensive

goods.

is traditionally used by businesses selling many inexpensive goods. The

purchase account is updated, while the merchandise inventory remains
unchanged until the company conducts a physical inventory count and
verification. This verification process typically occurs at the end of the
annual accounting period, commonly on December 31st.
Example of these businesses are supermarkets, convenience stores, hardware
stores, and sari-sari stores. The upgrading of inventory is done periodically
which usually once or twice a year through physical counting
 b. Perpetual inventory
system
the updating of inventory is done every time there are changes in the quantity of
the goods. This system is traditionally used by businesses selling few expensive
goods.

the updating of inventory is done every time there are changes in the quantity
of the goods. It means that when a company conducts a purchase, the
Merchandise inventory account is automatic updated. This system is
traditionally used by businesses selling few expensive goods. Examples of
businesses are jewelry stores, car dealers and furniture stores.
 EXAMPLE OF JOURNAL ENTRY

Perpetual
Merchandise inventory xxxxx
Accounts payable xxxxx
Periodic
Purchases xxxxx
Accounts payable xxxxx
 Transaction in a Merchandising
Business
2. Sales of Inventory: When the business
sells inventory to customers, it records the
sale by debiting the accounts receivable or
cash account (depending on whether the sale
is made on credit or for cash) and crediting
the sales revenue account. Simultaneously,
the cost of goods (COGS) account is debited.
 3. Sale Returns and allowances.
If a customer returns merchandise or receives an allowance for damaged or
defective goods, the business records the transaction by debiting the sales
returns and allowances account and crediting either the accounts receivable or
cash account (depending on the original method of payment).

Even after a sale is made, the customer can still return or replace
the merchandise bought as long as it meets the criteria set forth in
the Business Return and Exchange Policy.

Business allow seven days from date of purchase for returns or

replacement, but most businesses do not accept returns or
replacement if a) tag on merchandise is missing, b) No receipt, c)
damage is due to the fault of customer.
4. SALES DISCOUNT

If the business offers discounts to

customers for prompt payment, it
records the discount given as a debit
to the sales discounts account and a
credit to the accounts receivable or
cash discount.
5. Purchase returns and 6. Partial payment of account with
allowances. supplier.

If the business return merchandise to suppliers This transaction assumes that the
or receives an allowance for damaged or business has a remaining unpaid liability
defective goods purchased it records the to its supplier after the purchase
transaction by debiting the accounts payable transaction has been made.
account and crediting the inventory or cash Partial payment of account happens
account (depending o whether a refund is after the date of purchase but before
received or inventory is returned). the date of full payment of account. It
involves a decrease in both an asset
The transaction on purchase of and a liability
return and allowances can only
happen if there was a purchase of
merchandise to begin with.
7. PURCHASE DISCOUNT. To delineate discount terms,
the manufacturer may specify
descriptions like 2/10; n/30 on
● - if the retailer opts to pay on credit, they
negotiate payment terms with the manufacturer,
the invoice. Here, “2”
which outline various details such as the denotes the discount rates of
purchase cost, invoice date, potential discounts, 2%, “10” signifies the
shipping fees, and the deadline of final payment. discount period in days, and
● Offering purchase, discounts serves as an “n/30” indicates a net
incentive for the retailer to settle their accounts, payment term of 30 days
promptly, as it entails a reduce rate on the total without a discount.
purchase cost. Timely payment enables the
manufacturer to allocate funds for other business
endeavors and mitigates the risk of nonpayment.
Two types of purchase discount
● 2. Trade discount – is a price reduction
1. Cash discount - is a
negotiated before the purchase is made,
reduction applied to the final
directly affecting the manufacturer’s
price if a retailer makes advertised price. The magnitude of a
payment within a specified trade discount might increase with
discount period following the larger purchase volumes. While a cash
purchase discount is accounted for in journal
entries, trade discount are not, as they
are settled before the purchase
transaction.
Example: A retailer has an order of Php 4000
worth of inventory September 1. The
manufacturer offers a 15% trade discount if
the order is placed by September 5. Assuming
that the retailer places the Php4,000 order on
September 3, the purchase price would be
adjusted to Php3,400 after applying the 15%
trade discount (Php 4,000 – 600). Since the
trade discount is determined based on the
order placement date and not contingent on
payment deadlines, the initial journal entry to
record the purchase would affect the
discounted amount of Php3,400. Despite
receiving a trade discount, the retailer may still
qualify for an additional cash discount if they
pay within the discount window specified on
the invoice.
 8 Full payment of account with
supplier.
The business should make sure that
is has a good credit standing in
order to maintain good relationship
with the suppliers. The business
should pay off all its obligations as
they become due. This payment
happens on or before the last day of
the credit period.

Credit period refers to the

-
number of days from date of
purchase that the supplier has
given the business to pay its
accounts.
In certain cases, suppliers give an
incentive to business to pay their
accounts in full earlier than usual. The
incentive is known as cash discount
and it can only be availed by the
business if it pays its account in full
with the supplier within the discount
period. Discount period refers to the
number of days from date of purchase
that the supplier’s offer of a
percentage reduction in liability
remains valid.
9. Partial collection of customer account.

This affect only one side of account equation which is the left
side.

10. Full collection of customer account

There are different analyses based on whether
the account was collected in full within or
beyond the discount period.
Freight Costs: When the business incurs freight costs related to the purchase or sale of
inventory, it records these expenses by debiting the inventory account (for purchases) or the
freight out (or delivery expenses) account (for sales) and crediting the cash or accounts
payable account.
The complexity and variety of transactions may vary depending on the size, nature and
operations of the business. Proper recording and analysis of these transactions are crucial for
maintaining accurate financial records and making informed business decisions.
Merchandising enterprises are involved in the sale of products. In this type of business,
finished and packaged manufactured goods are acquired, marked up, and subsequently sold
to customers. Depending on the nature of the transaction, a merchandiser can function as
either the purchaser or the seller, determined by whether the product is being acquired (and
added to inventory) or sold (and deducted from inventory).
A vendor refers to a company or individual from whom a merchandiser
procures goods, while a customer denotes a company or individual to
whom a merchandiser sells goods.
Inventory encompasses items acquired for resale, distinct from supplies,
which are materials obtained for internal business operations rather than
for customer resale. For instance, if a merchandiser has Windex glass
cleaner in stock, it is considered inventory if intended for resale, but
classified as a supply if utilized for maintaining business premises.
Likewise, inventory differs from fixed assets such as equipment. For
example, desktops computers held by a merchandiser are deemed
inventory if intended for resale but categorized as equipment if utilized for
internal business functions.
 9. Payment of freight.
In merchandising transaction there are two parties, the buyer and seller. This means that for the
purchase and sale transactions, the following scenarios may have been taken place:

a. the buyer goes to the seller’s place of business to purchase merchandise

b. the buyer contacts the seller to order merchandise and the buyers pick up the merchandise from
the seller’s place

c. the buyer contacts the seller to order merchandise and the seller delivers goods to the buyers place

d. the seller goes to the buyer’s place to receive order or merchandise and delivers goods to the
buyers place of business.

However, there are certain instances wherein it is inconvenient for buyer and seller to get the
merchandise that’s why they hire the services of the third party to deliver the merchandise which
known as freight forwarder or freight company. Examples are LBC, FEDFEX, UPS AND 2GO.
FREIGHT – is the cost associated with transporting
goods from seller’s to buyer’s place of business. It
is commonly known as shipping cost.

Freight on merchandise purchase means that the amount of

freight is recorded by the buyer and because merchandise
is coming in to the buyer’s place of business, the Freight-in
account is used in the buyer’s book.

Freight on merchandise sold means that the amount of

freight is recorded in the seller’s book as Freight-out
because the merchandise is going out of the seller’s place
of business. Similar to Freight-in, freight-out reduces net
income which decreases owner’s equity. It is not part of the
cost of purchased merchandise or cost of goods sold. It is
part of seller’s operating expenses, specifically distribution
costs.
FREIGHT-IN - encompasses shipping expenses that the buyer is obligated to
cover upon receiving a shipment from the seller, including delivery and insurance
costs. When the buyers assumes shipping expenses, they incorporate these
costs into the purchase price, keeping the charges with inventory until its sales.
This adherence to the cost principle ensures that shipping expenses remain
associated with the merchandise as part of preparing it for sale from the buyer’s
perspective. Such expenses are thus retained within inventory until the
merchandise is sold, at which point the shipping charges, along with other
inventory costs are transferred to the Cost of Goods sold on the income
statement.
● For instance, A California Business Solutions
(CBS) acting as a buyer, procures 30
JOURNAL ENTRY
computers from a manufacturer for $80
each, with CBS also bearing the shipping Inventory 3,400
costs totaling $1,000. In this case, CBS
Accounts payable 3,400
would record the following entry to
acknowledge the purchase of goods and the To recognize purchase of goods and
associated freight-in expenses. Freight-in (30 x $80) + 1,000
FREIGHT-OUT – refers to the costs for which the seller is responsible
when shipping to a buyer, such as delivery and insurance expenses.
When the seller is responsible for shipping costs, they recognize this as
a delivery expenses. The delivery expense is specifically associated
with selling and not daily operations, thus, delivery expenses are
typically recorded as a selling and administrative expenses on the
income statement in the current period.
.
For example: CBS may sell
JOURNAL ENTRY
electronics packages to a customer
and agree to cover the $100 cost Delivery expense 100
associated with shipping and Cash 100
insurance. CBS would record the
To recognize freight-out shipping
following entry to recognie freight-out
costs
10. Purchase of supplies

Aside from merchandise, a

merchandising business can also
purchase other items such as
supplies. Both supplies and
merchandise are assets of
business. The main difference is
that merchandise is bought with
the intention of reselling it, while
supplies are bought with the
intention of using them in
business operations.
 11. Purchase of property, plant & equipment.

Merchandising businesses may also

purchase property plant and equipment
which is a tangible assets with estimated
useful life of more than one year which are
used in business operations.

12. Incurrence of expenses.

A merchandising business also incurs

operating expenses, regardless whether the
operating expenses is a distribution cost or an
administrative expenses, the effect on
accounting equation is the same.
 13. Payment of expenses – this
decrease cash and increase
expense. Therefore the effect on
the accounting equation is a
decrease in asset and decrease in
owner’s equity.
14. Owner’s investment of
merchandise. The owner may invest
any asset, whether cash or non-cash
into the business. This transaction
increase assets of the business and
owner’s equity. The investment
made is and initial or an additional
investment.
15. Owner’s withdrawal of merchandise.

This transaction affect the

account purchases in the
income statement. A
decrease in purchases means
decrease in cost of goods
sold which increases gross
profit, in turn increases
net income and owner’s
equity.
 ACCOUNTING CYCLE OF MERCHANDISING BUSINESS

1. ANALYZING BUSINESS 6. PREPARE 7. JOURNALIZING AND

TRANSACTIONS FROM FINANCIAL POSTING THE
SOURCE DOCUMENTS ADJUSTMENT ENTRIES
STATEMENTS

5. GATHERING 8. POSTING THE

ADJUSTMENTS CLOSING ENTRIES
2. JOURNALIZING AND PREPARING
WORKSHEETS 9. PREPARING POST
CLOSING TRIAL
BALANCE
3. POSTING TO THE 4. PREPARING
LEDGER TRIAL BALANCE 10. POSTING
REVENUES ENTRIES
 EXAMPLES OF MERCHANDISING BUSINESS TRANSACTIONS IN THE
BUYER’S BOOK

TRANSACTIONS ASSET LIABILITIES OE

1 Purchase of merchandise on cash basis - 0 -

2 Purchase of merchandise on account 0 + -

3 Purchase of merchandise with down - + -

payment

4 Purchase return & allowances on cash + 0 +

basis
5 Purchase return and 0 - +
allowances on account

6 Purchase return & 0 - +

allowances with down
payment

7 Partial payment of account - - 0

with supplier

8 Full payment of account - - 0

beyond discount period

9 Full payment of account - - +

within the discount period

10 Payment of freight on - 0 -
merchandise purchased
11 Payment of freight on - 0 -
merchandise sold

12 Purchase of supplies on +/- 0 0

cash basis

13 Returns on supplies +/- 0 0

purchased

14 Purchase of supplies on + + 0
account

15 Returns on supplies - - 0
purchased
16 Purchase of +/- 0 0
equipment on cash
basis

17 Allowance granted on +/- 0 0

equipment purchased

18 Purchase of +/- + 0
equipment with down
payment

19 Allowance granted on - - 0
equipment purchased
20 Incurrence of 0 + -
expenses

21 Payment of - 0 -
expenses

22 Payment of - - 0
expenses
already
recorded in
#20
23 Initial investment of + 0 +
merchandise by owner

24 Initial investment of + + +
merchandise with liability

25 Additional investment of 0 0 +/-

merchandise by owner

26 Owner’s withdrawal of 0 0 +/-

merchandise
SOURCES DOCUMENTS IN MERCHANDISING BUSINESS

SOURCE DOCUMENT referred to as business

document, it provides evidence that a
business transaction has occurred. It includes
details of the transaction such as the names
and address of the parties involved, when the
transactions happened, description of goods,
terms and conditions, amount of transaction
and applicable signature.
 COMMONLY USED SOURCE DOCUMENTS

1. SALES AND PURCHASE

INVOICES - it is issued by the
seller to the buyer indicating that
merchandise has been delivered,
therefore, the buyer is requested
to pay the amount due. For the
seller, the invoice is known as the
sales invoice or purchase invoice.
2. DELIVERY RECEIPT – is a
document issued by the seller to
confirm if merchandise has been
delivered to the billing address or
the buyer’s place of business. An
authorized signature from the
buyer’s end is proof that
merchandise has been received
in good condition by the buyer
and that the information on the
document matches the
merchandise received
3.Debit and Credit Memorandum – are
documents issued when there are returns
and allowances.

A debit memorandum or debit note is

issued by the buyer to notified the
supplier that there is reduction in the
Account payable maintained by the
buyer, therefore, to tally, the supplier has
to also reduce the related account
receivable.

A credit memorandum or credit note has

the same purpose as the debit
memorandum. The only difference is that
a credit memorandum is issued by the
seller to notify the buyer that the seller’s
account has been reduced and therefore
the related liability of the buyer is also
reduced.
4. Voucher - also known as a
payment voucher, is an internal
document which indicates
authorization for payment. It is
usually attached to the
supporting documents that
require payment such as an
invoice. The issuance of
vouchers reinforce the concept
that before a liability or expense
is to be paid for. This is the basis
of cash payments.
5. Official Receipt - is a
document which
acknowledges receipt of
cash or check. It is issued
by the party who collects the
payment. It provides
evidence that payment has
been made and that the
other party has collected it.
This is the basis for
recording cash receipts.
STEP 2: JOURNALIZING

JOURNALIZING – is the process of recording transactions

chronologically in a journal. The Journal is also known as the book
of original entry because it where the first record of business
transactions can be seen.

It is important to review the normal balance of the accounts. The

normal balance of an account is its increase side which may either
be a debit or a credit. An account with the normal debit balance is
increased by a debit and is decrease by credit. Similary, an
account with a normal credit balance is increased by a credit and
is decreased in debit

The merchandising transactions are recorded in both general and

special journals.
Types ACCOUNTS with normal debit and credit balances

NORMAL DEBIT BALANCE NORMAL CREDIT BALANCE

Assets Contra-asset

Contra – Liabilities Liabilities

Owner’s Drawing Owner’s capital

Contra-Revenues Revenues

Costs and Expenses Contra-Cost

 Example of accounts maintained in a merchandising business

Types of Accounts Titles

Accounts

Assets Cash, Account Receivable, Merchandise Inventory, Prepaid Insurance,

Store Supplies, Office Supplies, Store Furniture and Fixtures,
Office Furniture and Fixtures, Store Equipment, Office Equipment,
Delivery equipment, Transportation Equipment

Contra-Asset Allowance for Doubtful Accounts, Accumulation Depreciation-Store

Furniture, Accumulated Depreciation-Store Equipment

Liabilities Accounts Payable, Unearned Sales Revenue

Revenues Sales Revenues

Contra Sales Return & Allowances; Sales Discount

Revenues
Costs and Purchases, Freight-In, Freight-
Expenses Out, Office Salaries, Sales
Salaries, Office Supplies Expense,
Store supplies Expense

Contra- Purchase Returns and

Cost Allowances; Purchase
Discounts
 PROFORMA JOURNAL ENTRIES

1. Purchase of merchandise on the cash basis

DATE ACCOUNT TITLE & P.R. DEBIT CREDIT

EXPLANATION

2019

Aug 1 Purchases xxxx

Cash xxxx
2. Purchase merchandise on account

Date Account Title & Explanation P.R. Debit Credit

2 Purchases xxxx

Account Payable xxxx

To record the purchases

on account
3. Purchases mechandise with downpayment

Date Account Title & Explanation P.R. Debit Credit

3 Purchases xxx

Cash xxx

Account Payable xxx

To record purchases of
merchadise with
downpayment
4. Purchases returns and allowances on
cash basis
Date Account Title & Explaination P.R. DEBIT CREDIT

4 Cash xxxx

Purchase Returns & xxx

allowances

To record the purchase

return
and allowance for cash
 5. Purchases returns and allowances
on account
Date Account Title & Explanation P.R Debit Credit
.

5 Accounts Payable xxxx

Purchase Returns & xxx

Allowances

To record purchase return

And allowances on account
6. Purchases returns and allowances with
downpayment

Date Account Title & Explanation P,R, Debit Credit

6 Account Payable xxx

Purchase return & xxx

allowances

To record purchases return

And allowances with down
Payment
7. Partial payment of account with
suppliers

Date Accounts & Explanation P.R. Debit Credit

7 Accounts Payable xxxx

Cash xxxx

To record the partial

Payment
8. Full payment of account beyond
discount period

Date Account Titles & Explanation P.R. Debit Credit

8 Accounts Payable xxx

Cash xxx

To record the full payment

9. Full payment of account within discount
period

Date Account Titles & Explanation P.R. Debit Credit

8 Account Payable xxx

Cash xxx

Purchase Discount xxx

To record full payment of

Account with discount
10. Sale of merchandise on cash basis

Date Account Titles & Explanation P,R. Debit Credit

10 Cash xxxx

SAles xxx

To record the sales made

11. Sale of merchandise on account

Date Account Title & Explanation P.R. Debit Credit

11 Account Receivable xxx

Sales xxx

To record sales made on

account
12. Sale of merchandise with
downpayment

Date Account Titles & P.R. Debit Credit

Explanation

12 Cash xxxx

Account Receivable xxxx

Sales xxxx

To record sales made

With downpayment
13. Sales return and allowances on cash
basis

Date Account Titles & Explanation P.R. Debit Credit

13 Sales Return & Allowances XXX

Cash xxxx

To record sales return

& allowances
14. Sales return & allowances on account

Date Account Title & Explanation P.R. Debit Credit

14 Sales REturn & Allowances xxx

Account Receivables xxx

To record sales return &

Allowances on account
 15. Sales return and allowances with
downpayment

Date Account Title & Explanation P.R. Debit Credit

15 Sales Return and Allowances xxxx

Accounts Receivable xxx

To record sales return &

Allowances with
Downpayment
16. Partial collection of customer account

Date Account Title & Explanation P.R. Debit Credit

16 Cash xxxx

Account Receivable xxxx

To record the partial

Collection of customer
17. Full collection of account beyond a
discount period

Date Account Titles & Explanation P.R. Debit Credit

17 Cash xxxx

Account Receivable xxxx

To record the full payment

of account
18. Full collection of account within
discount period

Date Account Titles & Explanation P.R. Debit Credit

18. Cash xxxx

Sales Discount xxxx

Account Receivable xxx

To record full collection

Of account within
discount
Period
19. Payment of freight on merchandise
purchased

Date Account Titles & Explanation P.R. Debit Credit

19 Freight-In xxxx

Cash xxxx

To record the payment of

Freight on merchandise
20. Payment of freight on merchandise
sold

Date Account Titles & Explanation P.R. Debit Credit

20 Freight-out xxx

Cash xxx

To record the payment of

Freight on mechandise
21. Purchase of supplies on cash basis
Returns on supplies purchases

Date Account Titles & Explanation P.R. Debit Credit

21 Supplies xxx

Cash xxx

Cash xxx

Supplies xxx
22. Purchase of supplies on account
Returns on supplies purchased

Date Account Titles & P.R. Debit Credit

Explanation

22 Supplies xxxx

Accounts Payable xxxx

Accounts Payable xxxx

Supplies xxxx
23 Purchase of equipment on cash basis
Allowance granted on equipment
purchase
Date Account titles & explanation P.R. Debit Credit

23 Equipment xxxx

Cash xxxx

Cash xxxx

Equipment xxxx
24. Purchase of equipment with downpayment
Allowance granted on equipment
purchased

Date Accounts Title & Explanation P.R. Debit Credit

24 Equipment xxxx

Cash xxxx

Accounts Payable xxxx

Accounts Payable xxxx

Equipment xxxx
 25. Incurrence of expense

Date Accounts Titles & explanation P.R. Debit Credit

25 _____Expense xxxx

_______Payable xxxx

To record the incurred

Expense
26. Payment of expenses
Payment of expenses (already recorded in
#12
Date Accounts Title & Explanation P.R. Debit Credit

26 _________Expense xxxx

________Cash xxxx

________Payable xxxx

_______Cash xxxx
27. Initial investment of merchandise by owner
Initial investment of merchandise with liability

Date Account Titles & explanation P.R. Debit Credit

27 Merchandise Inventory xxxxx

Owner, Capital xxxx

Merchandise Inventory xxxxx

Accounts Payable xxxx

Owner, capital xxxx

 28. Additional investment of merchandise
by owner

Date Accounts Title & Explanation P.R. Debit Credit

28 Purchases xxxx

Owner, capital xxxx

To record additional
Investment of
merchandise
29. Withdrawal of merchandise by owner

Date Accounts Title & Explanation P.R. Debit Credit

29 Purchases xxxx

Owner, Capital xxxx

To record the withdrawal

Of merchandise by owner