Question

A closing process under the periodic inventory​ system, ________. A. Sales Revenue is closed with a credit via the Income Summary account B. the beginning Merchandise​ Inventory, Purchases, and Freight In are closed with a debit via the Income Summary account C. Purchase Returns and Allowances and Purchase Discounts accounts are closed with a credit via the Income Summary account D. the ending merchandise inventory balance must be recorded as a debit via the Income Summary account

Answer 1

The correct answer is D. the ending merchandise inventory balance must be recorded as a debit via the Income Summary account.

Step-by-step explanation:

In the periodic inventory, purchases of merchandise or raw material are not accounted for in the asset (Inventories), but are accounted for in the purchases account. At the end of the period, with the value accumulated there, the inventory set is made to determine the cost of sale.

• Returns of purchased merchandise are also posted to the purchasing account.
• Sales are accounted for in the respective income ditch, as is the return on sales.

When the inventory set is made, the physical count is made and the final inventory is determined, this final inventory is accounted for in the asset account (Inventories).