Under the periodic inventory system, the Purchases account is
A)a permanent account.
B)an account that is not closed.
C)a temporary account.
D)the same as the Inventory account and is reported on the statement of financial position.

Question

Quizplus · Accepted Answer

The Purchases account is a temporary account used in the periodic inventory system to record the purchases of inventory during the period. At the end of the accounting period, it is closed to the Income Summary or directly to the Cost of Goods Sold account.

Under the Periodic Inventory System, the Purchases Account Is