Asked by Kenrick Mendez on Apr 27, 2024
Verified
In a perpetual inventory system:
A) Merchandise Inventory is debited every time inventory is purchased.
B) Cost of Goods Sold is credited every time inventory is sold.
C) a physical inventory is never performed.
D) All of the above
Perpetual Inventory System
An inventory system that updates the quantity and cost of inventory immediately following purchase or sale activities.
Merchandise Inventory
Goods and products that a retailer, wholesaler, or distributor holds in stock with the intent to sell them for profit.
Cost of Goods Sold
The total direct costs attributable to the production of goods sold by a company during a specific period.
- Comprehend the journal entries related to the acquisition and subsequent return of inventory within the perpetual inventory system.
- Identify the differences in accounts within the perpetual inventory system.
- Understand the significance of physical inventory in the periodic system and its lack of necessity in the perpetual system.
Verified Answer
Learning Objectives
- Comprehend the journal entries related to the acquisition and subsequent return of inventory within the perpetual inventory system.
- Identify the differences in accounts within the perpetual inventory system.
- Understand the significance of physical inventory in the periodic system and its lack of necessity in the perpetual system.
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