Periodic Inventory System

Accounts

100

What accounts are only used for a periodic inventory system?

Purchases account
Purchases returns
Perchases discounts 

Definitions

100

What is "taking inventory"?

When a company counts their merchandise in order to put a value on their inventory

200

What is the "periodic inventory method"?

When a company counts all merchandise on hand at the end of the accounting period

True or False

100

True or false? Service businesses can use the periodic inventory system?

False

200

True or False? The periodic accounting system uses a merchandise inventory account?

False

Accounting period

100

When in the accounting period do businesses count their inventory?

Before the financial statements are prepared

Debit/Credit Rules

100

Does the Purchases account increase on the debit or credit side? 

Debit

200

What equation are the debit and credit rules based on?

Assets = Liabilities + Owner’s Equity

300

Does the Purchases Returns and Allowances account increase on the debit or credit side?

Credit Side

500

Does the purchases discount account increase on the debit or credit side?

Credit Side