The computation of Cost of Goods Sold under a periodic inventory system has the characteristics of both an adjusting entry and a closing entry.

Question

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The computation of Cost of Goods Sold (COGS) in a periodic inventory system involves adjusting the inventory account to reflect the cost of goods sold during the period, similar to an adjusting entry. It also involves closing out temporary accounts like purchases and beginning inventory to determine the COGS, similar to a closing entry.

The Computation of Cost of Goods Sold Under a Periodic