1.What is the major difference between a periodic and perpetual inventory system?

a.Under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the accounting period.

b.Under the periodic inventory system, no journal entry is recorded at the time of the sale of inventory for the cost of the inventory.

c.Under the periodic inventory system, the purchase of inventory will be debited to the Purchases account.

d.All of the answers are correct.

2.A company using the periodic inventory system has the following account balances: Inventory at the beginning of the year, $4,223; Freight-In, $592; Purchases, $13,216; Purchases Returns and Allowances, $4,261; Purchases Discounts, $258. The cost of merchandise purchased is equal to

a.$14,104

b.$22,550

c.$13,216

d.$9,289