Using a periodic inventory system, the entry to record the purchase of merchandise on account involves a:
A)debit to Inventory.
B)debit to Accounts Payable.
C)credit to Inventory.
D)debit to Purchases.

Question

Quizplus · Accepted Answer

In a periodic inventory system, purchases of merchandise are recorded by debiting the Purchases account, not the Inventory account. This approach is used to accumulate the cost of purchases during the period, which will then be used to calculate the cost of goods sold at the end of the period.

Using a Periodic Inventory System, the Entry to Record the Purchase