Under a Periodic Inventory System, Purchases, Purchases Returns and Allowances

question 180

True/False

Under a periodic inventory system, purchases, purchases returns and allowances, purchase discounts, and transportation in transactions are recorded in the Merchandise Inventory account.

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Definitions:

Cash Payments Journal

A specialized accounting journal used to record all payments made by a business, including expenses and purchases.

Accounts Payable

Liabilities of a business that are due to creditors within a short period, usually less than a year, for goods, services, or supplies purchased on credit.

Subsidiary Ledger

A ledger that provides detailed information about accounts in the general ledger, typically used for accounts receivable, accounts payable, etc.

Creditors

Individuals or entities to whom money is owed by the business or individual for goods or services that have been delivered or used but not yet paid for.