Asked by Ciara Lawrence on May 06, 2024
Verified
Under the periodic inventory system, the journal entry to record the purchase of inventory will include a debit to
A) Inventory
B) Purchases
C) Accounts Payable
D) Cost of Merchandise Purchased
Journal Entry
A journal entry is a record in the accounting books that logs a business transaction, indicating the accounts and amounts to be debited and credited.
Inventory
The total amount of goods and materials held by a business for the purpose of resale or production.
- Distinguish between periodic and perpetual inventory systems.
Verified Answer
HD
Hashtag DeliveredMay 09, 2024
Final Answer :
B
Explanation :
Under the periodic inventory system, purchases of inventory are recorded by debiting the Purchases account, not the Inventory account. This approach is used to accumulate the cost of purchases during the period, which is then used to calculate the cost of goods sold at the end of the period.
Learning Objectives
- Distinguish between periodic and perpetual inventory systems.