Asked by Alexia Keobangsy on Apr 26, 2024
Verified
Under a periodic inventory system,purchases,purchases returns and allowances,purchase discounts,and transportation-in transactions are recorded in the Merchandise Inventory account.
Periodic Inventory System
An accounting method that updates inventory levels and cost of goods sold at the end of an accounting period, not continuously.
Merchandise Inventory
The goods or products that a retailer or wholesaler intends to sell to customers for a profit.
Purchase Discounts
Reductions in the cost price of goods or services that are offered to purchasers when they pay within a specified period or meet certain conditions, aimed at encouraging prompt payment.
- Comprehend the recording processes under periodic and perpetual inventory systems.
Verified Answer
TR
Timika RievesMay 01, 2024
Final Answer :
False
Explanation :
Under a periodic inventory system, these transactions are recorded in separate accounts, not directly in the Merchandise Inventory account. The Merchandise Inventory account is updated at the end of the period based on a physical count.
Learning Objectives
- Comprehend the recording processes under periodic and perpetual inventory systems.