Under the Perpetual Inventory System, Which of the Following Accounts

question 76

Multiple Choice

Under the perpetual inventory system, which of the following accounts would not be used?

• A)Sales
• B)Purchases
• C)Cost of Goods Sold
• D)Merchandise Inventory

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Definitions:

Consumption Function

An economic formula that expresses the relationship between total consumption and gross national income, positing that people increase their consumption as income rises, but not necessarily by the same amount.

Aggregate Income

The total income earned by all individuals in an economy from all sources, including wages, rental income, and investment income, during a given time period.

Aggregate Consumption

The total amount of goods and services consumed in an economy over a specific time period.

Consumption Function

A formula in economics that depicts the correlation between overall consumption and the gross national income.