Why Do Most Manufacturers Use a Perpetual Inventory System

question 26

Multiple Choice

Why do most manufacturers use a perpetual inventory system?

• A)It is a requirement of Revenue Canada for all Canadian companies.
• B)It is generally accepted accounting principles.
• C)It is required for all manufacturers.
• D)It is a characteristic of a proper cost accounting system.

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Definitions:

Discretionary Income

The amount of an individual's income that is left for spending, investing, or saving after taxes and personal necessities (like food and shelter) are taken care of.

Gross Income

Total earnings received by an individual or company before any deductions such as taxes, expenses, and other contributions.

Disposable Income

The amount of money an individual or household has available to spend or save after taxes and necessities have been paid.

Interest Rates

The percentage charged on borrowed money or paid to investors, which reflects the cost of borrowing or the return on investment.