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

Question

Quizplus · Accepted Answer

Under the periodic inventory system, purchases of inventory are recorded by debiting the Purchases account and crediting Accounts Payable. This reflects the increase in inventory purchased on credit.

A Company Uses the Periodic Inventory Method