The journal entries to record the purchases of inventory on account are different based on the costing method chosen.

Question

Quizplus · Accepted Answer

The journal entries to record the purchases of inventory on account are the same regardless of the costing method chosen (FIFO, LIFO, or Average Cost). The difference in costing methods affects the cost of goods sold and ending inventory valuation, not the initial purchase journal entry.

The Journal Entries to Record the Purchases of Inventory on Account