Which of the following is TRUE of a purchases journal?
A) For a periodic inventory system, the Merchandise Inventory DR column is replaced with a column titled Cost of Goods Sold DR.
B) Cash purchases are recorded in the purchases journal.
C) For a perpetual inventory system, a column titled Purchases DR is needed.
D) The Other Accounts DR column is used for purchases on account of items other than merchandise inventory and office supplies.

Question

Quizplus · Accepted Answer

The Other Accounts DR column in the purchases journal is used for purchases on account of items other than merchandise inventory and office supplies. Option A is incorrect because in a periodic inventory system, the Merchandise Inventory DR column is not replaced with a column titled Cost of Goods Sold DR, but rather it is replaced with a column titled Purchases DR. Option B is incorrect because cash purchases are not recorded in the purchases journal. Option C is incorrect because for a perpetual inventory system, a column titled Merchandise Inventory DR is needed, not Purchases DR.

Which of the Following Is TRUE of a Purchases Journal