Asked by Abdulaziz Bin Dharman on Jul 25, 2024
Verified
Under the periodic inventory system, the cost of goods sold is equal to the beginning inventory plus the cost of merchandise purchased plus the ending inventory.
Periodic Inventory System
An inventory accounting system where updates to inventory levels are made on a periodic basis, rather than continuously, often at the end of an accounting period.
Cost Of Goods Sold
The direct costs attributable to the production of goods sold by a company.
- Differentiate between the periodic and perpetual inventory systems and their effects on financial statements.
Verified Answer
RK
Rohan KapoorJul 30, 2024
Final Answer :
False
Explanation :
Under the periodic inventory system, the cost of goods sold is calculated as beginning inventory plus purchases minus ending inventory.
Learning Objectives
- Differentiate between the periodic and perpetual inventory systems and their effects on financial statements.
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