At the end of the fiscal year, the purchases method of recording inventory adjusts the Expenditures account to reflect the amount of inventory actually used during the period.

Question

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The purchases method of recording inventory adjusts the Inventory account to reflect the amount of inventory purchased during the period, not the amount actually used. The cost of goods sold and inventory adjustments are made separately at the end of the period.

At the End of the Fiscal Year, the Purchases Method