When using a periodic inventory system,
A) a Purchases account is not used.
B) a Cost of Goods Sold account is used.
C) two entries are required to record a sale.
D) a Cost of Goods Sold account is not used.

Question

Quizplus · Accepted Answer

In a periodic inventory system, the cost of goods sold is only calculated at the end of the period, so a Cost of Goods Sold account is not used for each sale. Instead, the cost of goods sold is calculated by subtracting the ending inventory balance from the beginning inventory balance and adding the cost of goods purchased during the period. Therefore, option D is the correct answer.

When Using a Periodic Inventory System