This account is debited in a periodic inventory system, when goods are bought for resale.
A) Merchandise Inventory
B) Purchases
C) Purchase Discounts
D) Sales

Question

Quizplus · Accepted Answer

In a periodic inventory system, the Merchandise Inventory account is not updated continuously but only at the end of the fiscal period. Therefore, when goods are bought for resale, they are initially recorded in the Purchases account, which will be later used to calculate the cost of goods sold when the ending inventory is determined. The Merchandise Inventory account will be debited based on the cost of goods purchased during the period.

This Account Is Debited in a Periodic Inventory System, When