A Periodic Inventory System

question 115

Multiple Choice

A periodic inventory system

• A)Does not require a physical count of inventory.
• B)Records the cost of new merchandise purchased in a permanent account.
• C)Records the cost of new merchandise purchased in a temporary account.
• D)Requires updating the inventory account every month.
• E)All of these answers are correct.

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Definitions:

Capital Component

One of three sources of capital: debt, preferred stock, or equity.

Required By Investors

Refers to the expectations or conditions that investors demand before committing capital to an investment.

Capital Structure

The combination of borrowing and ownership investments utilized by a company to finance its activities and expansion.

WACC

A method known as the Weighted Average Cost of Capital (WACC) is used to calculate a corporation's cost of capital, with every capital category assigned a proportional weight.