In a periodic inventory system
A) The sales journal tracks merchandise inventory bought
B) The sales journal tracks decreases in inventory
C) The cash disbursements journal tracks purchase discounts
D) The cash receipt journal tracks cost of goods sold
E) The cash receipts journal tracks sales returns and allowances taken

Question

Quizplus · Accepted Answer

In a periodic inventory system, the cash disbursements journal is used to record transactions involving cash outflows, including purchase discounts. This journal helps in tracking the cash paid out, including any discounts received on inventory purchases, which can affect the overall cost of inventory. The other options are incorrect because they either pertain to different journals or involve processes not directly tracked in a periodic inventory system.

In a Periodic Inventory System