When a Company Uses the Periodic Inventory System in Accounting

question 16

Multiple Choice

When a company uses the periodic inventory system in accounting for its merchandise inventory, which of the following is true?

• A) Cost of goods sold is computed at the end of the accounting periods rather than at each sale.
• B) The inventory account is updated throughout the year as purchases are made.
• C) Purchases are recorded in the cost of goods sold account.
• D) The inventory account is updated after each sale.

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Definitions:

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much they deviate from the mean.

Historical Experience

Previous experiences or outcomes that are used as a guide or reference for making future decisions or predictions.

Labour Standards

Regulations and practices that aim to ensure fair treatment, safety, and well-being of workers in the workplace.

Allowances

Financial or other concessions granted to employees, customers, or other stakeholders, typically for specific purposes or as adjustments under certain conditions.