Which of the Following Statements Regarding Inventory Counts Is NOT

question 20

Multiple Choice

Which of the following statements regarding inventory counts is NOT true?

• A) Companies need to perform a physical count of their inventory at least yearly regardless of which inventory system is being used.
• B) A perpetual inventory system does not require a physical count during the accounting period to determine cost of goods sold.
• C) In a perpetual inventory system, the inventory count is compared to the inventory account balance to reveal shrinkage.
• D) If a company uses a perpetual inventory system and the inventory count at the end of the accounting period

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Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply.

Total Variable Costs

The sum of all costs that vary with the level of output, including materials and labor directly involved in the production process.

Output

The total amount of goods or services that are produced by a company or an economy.

Price Discounts

Reductions from the regular selling price of goods or services, often used as a strategy to increase demand or reward customers.