Mixed practice: retail and inventory
Objective: Combine inventory, tax, and closing skills.
Recommended first: Perpetual inventory basics, Sales tax basics
Retail books combine inventory, sales tax, discounts, and returns. Work methodically: sale side first, then cost side, then tax.
Retail tasks usually have a sale side and a cost side, and sometimes a tax side. Work through them in order and check each part separately. Returns reverse what a sale did; discounts reduce what was collected or paid; freight and other costs to bring goods to the store are part of inventory when the task says so.
Closing a merchandiser's revenue accounts brings contra accounts such as Sales Returns and Sales Discounts to zero along with Sales Revenue, so Income Summary receives net sales.
Check your work
- Is the sale recorded at selling price and the cost at inventory cost?
- Is any tax separated from revenue?
- Were returns and discounts recorded in contra accounts?
Pay $45 freight on incoming stock (part of inventory cost).
| Account | Debit | Credit |
|---|---|---|
| Inventory | $45.00 | |
| Cash | $45.00 |
Common mistakes
✗ Forgetting the cost side of a sale.
✓ Perpetual sales have two parts.
Guided practice
Use hints freely here.
Item 1 of 1
Sale of goods on account (perpetual)
On Mar 11, 2026, Little Fern Online Shop sells goods on account for $950.00. The goods cost $570.00. It uses a perpetual system. Record both effects in one compound entry.
Independent practice
Try these without hints. Completing the lesson needs at least one independent item solved without revealing the answer.
Item 1 of 6
Customer returns goods (perpetual)
On Mar 13, 2026, a customer returns goods sold on account for $170.00; the goods cost $102.00 and go back into stock in perfect condition. Record both effects.
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References and provenance
- OpenStax, Principles of Accounting, Volume 1: Financial Accounting (accessed 2026-10-29)
Original lesson written for Bookkeeping Exercises (AI-assisted drafting). Calculations are verified by the platform's automated accounting tests. Not yet reviewed by a credentialed accountant. Updated 2026-10-29.