Asked by Syecia Johnson on Jul 26, 2024
Verified
Under the perpetual inventory system, when a sale is made, both the sale and cost of goods sold are recorded.
Cost of Goods Sold
The total cost of materials and labor directly involved in producing goods sold by a company during a specific period.
Perpetual Inventory
An inventory tracking system that updates the quantity and cost of each item automatically as sales and purchases occur in real-time.
- Outline the differences between ceaseless and episodic inventory systems, including the distinct accounting practices associated with each.
Verified Answer
KB
Kelechi BenedictaJul 31, 2024
Final Answer :
True
Explanation :
Under the perpetual inventory system, each sale is recorded and the cost of the product sold is also recorded in real-time, updating the inventory balance. This allows for the determination of cost of goods sold at any time.
Learning Objectives
- Outline the differences between ceaseless and episodic inventory systems, including the distinct accounting practices associated with each.
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