Using a Periodic Inventory System, the Entry to Record the Purchase

question 18

Multiple Choice

Using a periodic inventory system, the entry to record the purchase of merchandise on account involves a:

• A)debit to Inventory.
• B)debit to Accounts Payable.
• C)credit to Inventory.
• D)debit to Purchases.

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Definitions:

Return on Assets

A profitability ratio indicating the efficiency with which a company uses its assets to generate earnings, calculated as net income divided by total assets.

Long-term Asset Turnover

A financial ratio that measures how efficiently a company uses its long-term assets to generate sales revenue.

Property, Plant, and Equipment

Long-term tangible assets used in the operating activities of a business, such as buildings, machinery, and equipment.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.