The following T-accounts are from the ledger of Hill Company.Hill uses the periodic inventory system.
Which of the following is true about Hill Company?

Question

Quizplus · Accepted Answer

The T-accounts for Inventory and Accounts Payable indicate that Hill Company purchased inventory on account. Option A is incorrect because the Purchases account is debited for the cost of goods sold, not credited. Option B cannot be confirmed, as there is no information provided about any return of merchandise. Option C is incorrect because the Purchases account is an expense account, and its balance is closed out to the Income Statement at year-end, not the Balance Sheet.

The Following T-Accounts Are from the Ledger of Hill Company