At period end under the periodic system, the temporary accounts Purchases, Freight-in, Purchases Discounts and Purchases Returns are closed into which permanent account?

1. The four periodic temporary accounts substitute for Merchandise Inventory during the period. 2. At period end they are closed to their related permanent account, Merchandise Inventory, in the same entry that records cost of sales. 3. Retained Earnings is where income-statement accounts close, not these inventory-related temporaries. 4. Cost of Sales is an outcome of the entry, and Accounts Payable is a liability, not the target permanent account. _Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §3.5 "Basic Merchandising Transactions (Periodic Inventory System)", p.107_