The Primary Difference Between a Periodic and a Perpetual Inventory

question 125

Multiple Choice

The primary difference between a periodic and a perpetual inventory system is that a periodic system

• A)keeps a detailed record showing the inventory on hand at all times.
• B)provides better control over inventories.
• C)records the cost of goods sold on the date the sale is made.
• D)determines the cost of goods sold at the end of the accounting period.

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefits to society from trade.

Mandated Price

A price set by legislation or regulatory authority, not determined by market forces, usually to protect consumers or ensure fair competition.

Surplus Change

A variation in the surplus amount, which can result from changes in market conditions or policies affecting supply and demand.

Sellers' Costs

The total expenses incurred by sellers in providing goods or services, including production, labor, and material costs.