BUISENESS MANAGEMENT
MERCHANDISING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The Inventory account is credited for the cost of the items sold.
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The Inventory account is adjusted at the end of the accounting period.
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A physical inventory count should be done on occasion.
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The Inventory account is debited when a purchase of goods is made.
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Detailed explanation-1: -Which of the following is true of both the periodic inventory and the perpetual method? The Inventory account is credited for the cost of the items sold.
Detailed explanation-2: -Perpetual inventory systems are especially suitable for large companies that track high-volume sales. Periodic physical counts are still necessary with a perpetual system but are conducted less often and at lower cost and scale.
Detailed explanation-3: -Under a perpetual inventory system, it continually updates only the inventory and cost of goods sold accounts. Purchase discounts are lodged under the inventory account. Option C is correct. Under the periodic inventory system, the cost of goods sold account or the inventory account is not computed daily.
Detailed explanation-4: -Answer: b. Perpetual inventory systems require more detailed inventory records. The b. Perpetual inventory systems require more detailed inventory records as it requires the regular updating of the merchandise inventory and the cost of goods sold accounts.