There are two method of accounting treatment of Iventory, Periodic System & Perpetual System

Under Perpetual system, there will no "Purchase Account" maintained, instead, the following entries will be passed:

For recording purchases:
Dr. Inventory
Cr. Accounts Payable

For recording sales:
Dr. Accounts Receivable (with selling price)
Cr. Sales (with selling price)
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Dr. Cost of Goods Sold (at cost)
Cr. Inventory (at cost)
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Under Periodic Inventory System, the following entry will be passed:

For recording purchases:
Dr. Purchases
Cr. Accounts Payable

For recording sales:
Dr. Accounts Receivable
Cr. Sales
------------------------------------------------------

Since no Inventory Account is maintained under the periodic system, you need to take a physical count of inventory and value your closing stock at the end of the period and the following entry shlould be passed prior to preparing the Trading & P/L Account:

Dr. Stock Account
Cr. Trading Account

The Purchase Account balance will be trasferred to the Debit side of the Trading Account.
Now, your stock account will show a balance which will be Debited to the Trading Account as Opening Stock in the next period Trading Account wit the following entry:

Dr. Trading Account
Cr. Stock Account


Hope this helps

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