In a Periodic Inventory System

question 85

Multiple Choice

In a periodic inventory system

• A) The company records the cost of new merchandise in the permanent Purchases account
• B) The cost of merchandise on hand is determined by relating the quantities on hand to records showing each item's original cost
• C) The inventory value is not based on a physical count
• D) A continuous record of the amount of inventory on hand is maintained
• E) None of these

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Definitions:

Bank Charters

Legal documents issued by a governmental or regulatory body granting the right to operate as a bank and outlining the specific conditions under which the bank must operate.

Savers

Individuals or entities that set aside a portion of their disposable income, rather than using it for consumption expenditures.

Borrowers

Individuals or entities that take out loans from financial institutions or individuals, agreeing to repay them over time, typically with interest.

Speculative Motive

The intention to hold cash for the purpose of taking advantage of future changes in the value of assets, securities, or commodities.