Question 1

of 1

Which of the following statements is not correct?

When a periodic system is in use, the Purchases account must be credited for its account balance to close this account to the Income Summary account.

When a periodic inventory system is in use, the Merchandise Inventory account is both debited and credited in the closing entry process.

When a periodic system is in use, the Purchases Returns and Allowances, the Purchases Discounts, and the Transportation-In accounts must be debited to close their account balances to the Income Summary account.

When a periodic system is in use, each Purchases, Purchases Return and Allowance, Purchases Discount, and Transportation-In transaction is recorded in a separate temporary account.