When inventory records are maintained using a periodic inventory system, a purchases account is used and the inventory is unchanged during the period.

Question

Quizplus · Accepted Answer

In a periodic inventory system, purchases are recorded in a separate purchases account throughout the accounting period, and the inventory account is only updated at the end of the period when a physical inventory count is conducted to determine the cost of goods sold and ending inventory.

When Inventory Records Are Maintained Using a Periodic Inventory System