# Under Periodic Accounting is the 'Purchases' Account a Balance Sheet or P&L Account

#### ptownbro

I've gone through countless examples of the difference between periodic versus perpetual accounting and none of them ever clearly state whether or not the 'Purchases' account under periodic accounting is a Balance Sheet or P&L account. Can someone tell me and provide reference(s) to verify and read further (if possible)?

Why this matters is if I do my physical count at the end of the quarter, I'd like to know what my P&L will be in first 2 months of that quarter. Whether the purchases account is on the Balance Sheet or P&L makes a big difference.

Basic Example:
1. Beginning inventory is 200 units at \$10 = \$2,000
2. In each of months 1, 2, and 3 you purchase 600 units at \$10 for \$6,000 each month = \$18,000
3. In each of months 1, 2, and 3 you sell 400 units at \$20 for \$4,000 each month = \$24,000
4. Ending inventory in month 3 is 800 units at \$10 = \$8,000

Journals:
Mth 1
Dr. Purchases 6,000
Cr. Cash -6,000
Dr. Cash 4,000
Cr. Sales -4,000

Mth 2
Dr. Purchases 6,000
Cr. Cash -6,000
Dr. Cash 4,000
Cr. Sales -4,000

Mth 3
Dr. Purchases 6,000
Cr. Cash -6,000
Dr. Cash 4,000
Cr. Sales -4,000
Dr. COGS 12,000
Dr. Inventory 6,000
Cr. Purchases -18,000