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Arnob Hussain
on Nov 15, 2024

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Under a periodic inventory system,

A) purchases of inventory are debited to the Purchases account.
B) freight incurred on merchandise purchases by the buyer should be debited to the Inventory account.
C) purchases of merchandise are usually credited to the Purchases account.
D) freight incurred on merchandise sales by the seller should be debited to the Freight In account.

Periodic Inventory System

An inventory accounting system where the inventory level is updated and the cost of goods sold is calculated at the end of a period, rather than after each sale.

Purchases Account

An account used in accounting to record the total cost of goods bought for resale during an accounting period.

Freight In

The cost of transporting goods into a business, usually included in the cost of inventory.

  • Pinpoint the variances between periodic and perpetual inventory systems.
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AP
Akash PatelNov 15, 2024
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