The second adjusting entry for merchandise inventory with the periodic inventory system is to debit Merchandise Inventory for the amount of the beginning inventory.

Question

Quizplus · Accepted Answer

The second adjusting entry for merchandise inventory with the periodic inventory system is actually to credit Purchases for the amount of the beginning inventory, not to debit Merchandise Inventory. This adjusts the beginning inventory balance to reflect the fact that it was included in purchases during the current period.

The Second Adjusting Entry for Merchandise Inventory with the Periodic