Homework Answers
A company purchases merchandise for $500 plus a freight charge of $50 from s supplier. Using the periodic system of inventory, Following will be impact of the given transaction:
(i) Purchases will be debited by $500 since the cost of inventory purchased is $500
(ii) Freight in will be debited by $50 as it is an expense.
(iii) Accounts payable will be credited by $550 ( $500 for cost of inventory and $50 for freight in).
Hence, option first, second and fourth are correct.
Kindly comment if you need further assistance. Thanks‼!
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