If a Company Were Using a Periodic Inventory System, Which $\begin{array}{|c|c|c|}\hline \text { Dr. Inventory } & 20,000 & \\\hline \text { Cr. Accounts payable } & & 20,000\\ \hline\end{array}$

question 37

Multiple Choice

If a company were using a periodic inventory system, which of the following entries is the correct journal entry to record the purchase of $20,000 of merchandise on account?
a)
$\begin{array}{|c|c|c|}\hline \text { Dr. Inventory } & 20,000 & \\\hline \text { Cr. Accounts payable } & & 20,000\\ \hline\end{array}$

b)
$\begin{array}{|c|c|c|}\hline \text { Dr. Inventory } & 20,000 & \\\hline \text { Cr. Purchases } & & 20,000 \\\hline\end{array}$

c)
$\begin{array}{|c|c|c|}\hline \text { Dr. Purchases } & 20,000 & \\\hline \mathrm{Cr} \text {. Inventory } & & 20,000\\ \hline\end{array}$

d)
$\begin{array}{|c|c|c|}\hline \text { Dr. Purchases } & 20,000 & \\\hline \text { Cr. Accounts payable }& & 20,000 \\\hline\end{array}$

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D

---

Definitions:

Allocating

The process of distributing resources or expenses among departments, projects, or activities based on set criteria or methods.

Direct Materials Inventory

Raw materials that can be directly attributed to the production of finished goods, physically incorporated into the product.

Direct Labor

The labor costs directly attributed to the production of goods or services, such as wages paid to workers specifically engaged in manufacturing processes.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor expenses.