A local area network is a user-controlled network that operates without the assistance of a common carrier. It can have several personal computers attached to a host computer, can be linked as part of several LANs that may or may not communicate with a host computer, or can be connected together but not connected to a host computer stand alone). A peer-to-peer network operates without a mainframe or file server.

To convert from the cash basis cash payments) to the accrual basis cost of goods sold), an accounts payable must be added to cash payments for goods to determine net purchases.
Net purchases is then adjusted for the change in inventory to determine cost of goods sold.