The Inventory account is used in each of the following except the entry to record
A) goods purchased on account.
B) the return of goods purchased.
C) payment of freight on goods sold.
D) payment within the discount period.

Question

Quizplus · Accepted Answer

The Inventory account is a temporary account used to record the cost of goods purchased and sold. It is not used to record payment of expenses associated with the purchase or sale of goods, such as payment of freight. Freight paid on goods sold is recorded as an expense in the Freight-Out account, and payment within the discount period is recorded in the Accounts Payable account. The Inventory account is used to record goods purchased on account and the return of goods purchased, as these transactions affect the cost of goods available for sale.

The Inventory Account Is Used in Each of the Following