The Journal Entry to Purchase Merchandise Under a Periodic Inventory

question 65

Multiple Choice

The journal entry to purchase merchandise under a periodic inventory system includes a:

• A)debit to cost of goods sold.
• B)debit to inventory.
• C)credit to purchases.
• D)debit to purchases.

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Definitions:

Consumer Confidence

A measure of the overall consumer optimism about the state of an economy, reflected through spending and saving behaviors.

Housing Bubble

A temporary condition characterized by an unusual increase in housing prices fueled by demand, speculation, and exuberant spending to the levels that income levels do not support.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers, usually downward sloping to the right indicating inverse relationship between price and quantity demanded.

Normal Good

A good for which demand increases as the income of the consumer increases, and vice versa.