Under the Periodic Inventory System

question 100

Multiple Choice

Under the periodic inventory system:

• A)inventory records are updated immediately after each purchase.
• B)inventory must be counted at the end of each accounting period.
• C)inventory does not have to be counted.(It can be taken from the accounting records. )
• D)inventory levels must be counted every day.

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Definitions:

Ordinary Assets

Assets that are held for sale in the ordinary course of a business or are otherwise not capital assets, including inventory and property used in a trade or business.

Inventory

Goods and materials held by a business for the purpose of sale or production.

Trade or Business

Trade or Business refers to any activity conducted for profit or livelihood, including goods and services production, buying, selling, or providing services.

Ordinary Loss

A loss incurred in the regular operation of a business or the sale of assets used in the business that can be fully deducted in the year it occurs.