When recording the sale of merchandise inventory,using a periodic inventory system,________.
A)a running record of merchandise inventory is maintained during the accounting period
B)the Sales Revenue account is credited only as an adjusting entry because sales information is not needed during the accounting period
C)sales discounts and sales returns and allowances are not recorded
D)there is no need to record an entry to the Merchandise Inventory and the Cost of Goods Sold accounts

Question

Quizplus · Accepted Answer

In a periodic inventory system, the Merchandise Inventory and the Cost of Goods Sold accounts are updated only at the end of an accounting period through adjusting entries. Therefore, there is no need to record an entry to these accounts at the time of the sale of merchandise inventory. Sales discounts and returns are also recorded at the end of the accounting period through adjusting entries. However, a running record of the merchandise inventory may be necessary to determine the ending inventory balance and the cost of goods sold at the end of the period.

When Recording the Sale of Merchandise Inventory,using a Periodic Inventory