Under the Periodic Inventory System,the Journal Entry to Record the Cost

question 106

Multiple Choice

Under the periodic inventory system,the journal entry to record the cost of ending inventory determined by a physical count is:

• A)debit Inventory and credit Cost of Goods Sold.
• B)debit Inventory and credit Sales Revenue.
• C)debit Purchases and credit Inventory.
• D)debit Cost of Goods Sold and credit Inventory.

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Definitions:

Aggregate Supply

The total supply of goods and services available to a particular market from producers at different price levels.

Discretionary Policy

A policy where government entities, like central banks or governments themselves, decide on actions or measures to take based on current economic conditions.

Self-corrective Forces

Mechanisms within the market economy that work to naturally correct imbalances and return the economy to a state of equilibrium without external intervention.

Rational Expectations

The hypothesis that individuals form forecasts about the future based on all available information in a way that is consistent with the actual structure of the economy.