When recording in a purchases journal with a periodic inventory system, the Merchandise Inventory DR column would be replaced with a column titled Cost of Goods Sold DR.

Question

Quizplus · Accepted Answer

In a periodic inventory system, the cost of goods sold is not recorded at the time of purchase. Rather, it is calculated at the end of an accounting period by subtracting the ending inventory from the beginning inventory and purchases. Therefore, there would still be a column titled Merchandise Inventory DR in the purchases journal.

When Recording in a Purchases Journal with a Periodic Inventory