The first adjusting entry for merchandise inventory with the periodic inventory system is a credit to Merchandise Inventory and a debit to Income Summary.

Question

Quizplus · Accepted Answer

This is true, as the periodic inventory system requires adjusting entries to be made at the end of the accounting period to record the cost of goods sold, which is transferred from Merchandise Inventory to Income Summary.

The First Adjusting Entry for Merchandise Inventory with the Periodic