When using periodic inventory,the closing process begins with closing out the Beginning inventory to Cost of goods sold.The second step is to set up the ending inventory by debiting Cost of goods sold and crediting Inventory.

Question

Quizplus · Accepted Answer

The steps are reversed for periodic inventory. The first step is to set up the ending inventory by debiting Inventory and crediting Cost of goods sold. The second step is to close out Beginning inventory to Cost of goods sold.

When Using Periodic Inventory,the Closing Process Begins with Closing Out