When a company uses the periodic inventory system,which of the following is true?
A)Purchases are recorded in the cost of goods sold account.
B)The inventory account is updated after each sale.
C)Cost of goods sold is computed at the end of the accounting period rather than at each sale date.
D)The inventory account is updated throughout the year as purchases are made.

Question

Quizplus · Accepted Answer

Under the periodic inventory system, the inventory account is not updated after each sale. Instead, the cost of goods sold is computed at the end of the accounting period based on a physical count of the inventory on hand and the purchases made during the period. Therefore, choice C is the correct option.

When a Company Uses the Periodic Inventory System,which of the Following