A Firm Uses the Periodic Inventory Method

question 68

Multiple Choice

A firm uses the periodic inventory method. Which of the following entries would be made to record a $1 100 purchase of inventory on credit, including GST?

• A)The accounting entry would be a $1 100 debit to Accounts payable and a $1 100 credit to Purchases.
• B)The accounting entry would be a $1 000 debit to Purchases, a $100 debit to GST Clearing and a $1 100 credit to Accounts payable.
• C)The accounting entry would be a $1 000 debit to Inventory, a $100 debit to GST Clearing and a $1 100 credit to Accounts payable.
• D)The accounting entry would be a $1 100 debit to Accounts payable, a $1 000 credit to Inventory, and a $100 credit to GST Clearing.

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Definitions:

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