MANAGEMENT

Detailed explanation-1: -What account is debited when recording a purchase of inventory when using a periodic inventory system? The purchase account is debited when recording a purchase of inventory while using a periodic inventory system.

Detailed explanation-2: -Under periodic inventory procedure, a merchandising company uses the Purchases account to record the cost of merchandise bought for resale during the current accounting period. The Purchases account, which is increased by debits, appears with the income statement accounts in the chart of accounts.

Detailed explanation-3: -Under the periodic inventory system, all purchases made between physical inventory counts are recorded in a purchases account. When a physical inventory count is done, the balance in the purchases account is then shifted into the inventory account, which in turn is adjusted to match the cost of the ending inventory.

Detailed explanation-4: -In a periodic system, you enter transactions into the accounting journal. This journal shows your company’s debits and credits in a simple column form, organized by date. Record the purchase of inventory in a journal entry by debiting the purchase account and crediting accounts payable.