All of the Following Statements Are True Regarding the Periodic

question 74

Multiple Choice

All of the following statements are true regarding the periodic inventory system except

• A)Under the periodic inventory system, the balance of cost of goods sold is calculated at the end of the period.
• B)Under the periodic inventory system, the balance in ending inventory is calculated at the end of the period.
• C)Using the periodic inventory system affects the balance sheet contents differently than when the perpetual system is used.
• D)Under the periodic system, a company uses separate accounts to record freight costs, returns, and discounts.

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Definitions:

Hours Worked

The total number of hours spent by employees completing their job duties during a specific time frame.

Direct Labor Costs

Expenses associated with the wages of employees who are directly involved in the production process of goods or services.

Indirect Labor Costs

Costs associated with employees who do not directly work on a product, but whose services are necessary for the production process.

Job Cost Sheets

Documents that track the direct and indirect costs associated with a specific job or project, helping in assessing its profitability.