Which of the following transactions will cause a liability to be credited and a cost account to be debited when the periodic inventory system is in use?

Question

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When merchandise inventory is purchased on account, it increases the liability to the creditor and the cost account is debited as per the periodic inventory system. Choices A and B are not relevant as they relate to adjusting entries for depreciation and supply consumption, respectively. Choice D also increases liability but is not a cost account, as it pertains to office supplies.

Which of the Following Transactions Will Cause a Liability to Be