What type of journals does Xero post for inventory accounting?

Xero uses various designated inventory journals to handle inventory accounting, making this the correct choice. These journals facilitate the tracking and management of inventory movements within the accounting system. When inventory is bought or sold, Xero automatically generates the necessary journal entries to reflect these transactions, which includes both the cost of goods sold and the relevant purchases.

Inventory accounting in Xero involves complex transactions like purchases, sales, adjustments, and transfers. By using designated inventory journals, Xero ensures that all these activities are accurately represented in the financial records. This not only supports accurate financial reporting but also aids businesses in managing their stock levels effectively.

The other options do not encapsulate the comprehensive capabilities of Xero in managing inventory through designated journals. It’s important to recognize that just focusing on sales or purchase journals would not cover the complete picture of inventory transactions, as effective inventory accounting requires the integration of multiple types of journal entries.