A company uses the periodic inventory method.Which of the following entries would be made to record a $1,200 purchase of inventory on account?
A) The accounting entry would be a $1,200 debit to Purchases and a $1,200 credit to Accounts payable.
B) The accounting entry would be a $1,200 debit to Accounts payable and a $1,200 credit to Purchases.
C) The accounting entry would be a $1,200 debit to Inventory and a $1,200 credit to Accounts payable.
D) The accounting entry would be a $1,200 debit to Accounts payable and a $1,200 credit to Inventory.

Question

Quizplus · Accepted Answer

Under the periodic inventory system, purchases are recorded by debiting the Purchases account and crediting Accounts Payable, reflecting the increase in inventory bought on credit.

A Company Uses the Periodic Inventory Method