Which of the following is true of a purchases journal?
A)In a purchase journal, the Merchandise Inventory DR column would be replaced with a column titled Cost of Goods Sold DR for a periodic inventory system.
B)Cash purchases are recorded in the purchases journal.
C)A purchases journal is not used for a perpetual inventory system.
D)In a purchases journal, the Other Accounts DR columns are used for purchases on account of items other than merchandise inventory and office supplies.

Question

Quizplus · Accepted Answer

Option A is incorrect as the Merchandise Inventory DR column is used for recording purchases relating to inventory in the purchases journal for both periodic and perpetual inventory system. Option B is incorrect as cash purchases are recorded in the cash disbursement journal, not in the purchases journal. Option C is incorrect as the purchases journal is used for both periodic and perpetual inventory system. Therefore, the correct option is D as the Other Accounts DR columns are used to record purchases made on account of items other than merchandise inventory and office supplies.

Which of the Following Is True of a Purchases Journal