Fabulous Furniture uses a periodic inventory system. Many purchases and sales of goods occur during the financial year. For Fabulous Furniture, the balance in the general ledger inventory account:

Question

Quizplus · Accepted Answer

In a periodic inventory system, the balance in the general ledger inventory account does not change until a physical inventory count is conducted, typically at the end of an accounting period. Transactions during the period are recorded in temporary accounts, not directly in the inventory account.

Fabulous Furniture Uses a Periodic Inventory System