Sales and Purchase Transactions
In a sales transaction, both the selling and buying entities have economic events that must be recognized in their accounting information system. Students enrolled in a principles of financial accounting course often confuse the accounts to be used by the seller and buyer. This problem-based learning activity helps students practice recording a business-to-business sales/purchase transaction that included credit terms from both perspectives. The problem applies the gross method for recording sales and purchases for a perpetual inventory scenario.