A Firm Uses the Periodic Inventory Method

Multiple Choice

A firm uses the periodic inventory method. Which of the following entries would be made to record a purchase of inventory on credit?

A) The accounting entry would be a debit to Inventory, a debit to GST Clearing and a credit to Accounts payable.
B) The accounting entry would be a debit to Accounts payable, a credit to Purchases and a credit to GST Clearing.
C) The accounting entry would be a debit to Accounts payable, a credit to Inventory and a credit to GST Clearing.
D) The accounting entry would be a debit to Purchases, a debit to GST Clearing and a credit to Accounts payable.