Under a Periodic Inventory System, the Buyer Does Not Use

question 17

Multiple Choice

Under a periodic inventory system, the buyer does not use which of the following accounts in recording purchases and related transactions?

• A)Purchases
• B)Purchase Returns and Allowances
• C)Purchase Discounts
• D)Merchandise Inventory

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Definitions:

Current Account

Part of a nation's balance of payments encompassing the trade balance, net primary income, and net secondary income components.

Balance of Payments

A comprehensive summary of a country's economic transactions with the rest of the world over a specific time period, including trade, services, and financial transfers.

Capital Account

A component of a nation’s balance of payments that records all transactions of purchase and sale of assets, like real estate and stocks with other countries.

Financial Account

A component of a country's balance of payments that records transactions of foreign investment and domestic investments abroad.