Asked by Blake French on Jun 26, 2024
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Under the periodic inventory method, the ending inventory is adjusted by debiting Income Summary and crediting Merchandise Inventory.
Periodic Inventory Method
An accounting method which involves physically counting the inventory at specific intervals to determine the cost of goods sold and the ending inventory balance.
Income Summary
An account used in the closing process that aggregates all income and expenses to determine the net income or loss for the period.
Merchandise Inventory
The goods a company has available for sale to customers, considered a current asset on the balance sheet.
- Analyze how adjustments on the worksheet reflect on the financial statements.
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Learning Objectives
- Analyze how adjustments on the worksheet reflect on the financial statements.
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