In the periodic inventory system, purchases of merchandise for resale are debited to the purchases account.

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In the periodic inventory system, purchases of merchandise for resale are debited to the purchases account. This account is used to track the total cost of merchandise purchased during a specific period. At the end of the period, the cost of goods sold is calculated, and the inventory balance is adjusted. Therefore, periodic inventory system is also known as the periodic weighted average method.

In the Periodic Inventory System, Purchases of Merchandise for Resale