Maui Company uses the periodic inventory method. The company purchased an item of inventory for $90 and sold the item to a customer for $115. What effect will this sale have on the balance in the company's inventory account at the date of the sale?

Question

Quizplus · Accepted Answer

Under the periodic inventory method, inventory is updated at the end of the accounting period, not at the time of sale. Therefore, the sale will have no immediate effect on the inventory account balance.

Maui Company Uses the Periodic Inventory Method