When the Periodic Inventory System Is Used

question 38

Multiple Choice

When the periodic inventory system is used:

• A)operating profit from the sale of an item from inventory is known when the item is sold.
• B)gross profit from the sale of an item from inventory is known when the item is sold.
• C)cost of goods sold can be calculated by subtracting the ending inventory amount from the sum of beginning inventory and net purchases.
• D)the inventory account is adjusted on a daily basis throughout the year as inventory items are purchased and sold.

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Definitions:

Negative Income Tax

A system of social welfare provision that makes direct payments to individuals whose income falls below a certain level, effectively subsidizing their income.

Taxes Owed

The amount of tax liability a taxpayer is responsible for paying to the tax authorities.

Income Level

A measure of the amount of money earnings or revenue a person or entity receives within a specific time period.

Total Utility

The overall satisfaction or benefit a consumer receives from consuming a specific quantity of goods or services.