Which of the Following Statements Is True

question 178

Multiple Choice

Which of the following statements is true?

• A)Inventory data can be identified and controlled better under the perpetual system.
• B)Inventory can only be sold at the end of an accounting period under the periodic system.
• C)There is no difference in cost to implement a perpetual as compared to a periodic system.
• D)The perpetual system eliminated the need for an annual inventory count.

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Definitions:

Cost Per Equivalent Units

A method used in process costing that calculates the cost assigned to units produced during a period, considering partially completed units as fractions of whole units.

Weighted Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory balance using a weighted average of the costs of all items available for sale during the period.

FIFO Costing

An inventory valuation method that assumes that the first items placed in inventory are the first ones sold, standing for First In, First Out.

Unit Costs

The cost incurred by a company to produce, store, and sell one unit of a particular product or service.