Hill Company Uses the Periodic Inventory System

Hill Company uses the periodic inventory system. It records a transaction that increases the balances in its purchases and accounts payable accounts. Which of the following is true about Hill Company?

A) When the related merchandise is sold, the purchases account will be decreased by the related cost of goods sold.
B) The manner in which this transaction was recorded indicates that Hill returned $6,000 of merchandise to a supplier.
C) The balance in the account will appear on the balance sheet at year end.
D) The manner in which this transaction was recorded indicates that Hill purchased inventory on account.