Which inventory system uses a purchases account?

Which inventory system uses a purchases account?

Under the periodic inventory system, all purchases made between physical inventory counts are recorded in a purchases account.

Which inventory system requires purchases of merchandise to be recorded in the inventory account instead of the purchases?

Companies may use either the perpetual system or the periodic system to account for inventory. Under the periodic system, merchandise purchases are recorded in the purchases account, and the inventory account balance is updated only at the end of each accounting period.

Which of the following inventory systems requires a physical count in order to determine cost of goods sold?

The periodic system relies upon an occasional physical count of the inventory to determine the ending inventory balance and the cost of goods sold, while the perpetual system keeps continual track of inventory balances.

When the perpetual inventory system is used in what account are purchases recorded?

In a perpetual inventory system, purchases are recorded in the Merchandise Inventory account. In a periodic inventory system, purchases are recorded in the Purchases account. Identify the four special journals typically used by a business. Purchases journal, cash payments journal, sales journal, cash receipts journal.

How do you record purchases of inventory?

Inventory purchases are recorded on the operating account with an Inventory object code, and sales are recorded on the operating account with the appropriate sales object code. A cost-of-goods-sold transaction is used to transfer the cost of goods sold to the operating account.

How do you record purchases in the periodic inventory system?

Record the purchase of inventory in a journal entry by debiting the purchase account and crediting accounts payable. Record the purchase discount by debiting the accounts payable account and crediting the purchase discount account.