A Perpetual Inventory System

question 7

Multiple Choice

A perpetual inventory system

• A) only records the inventory on hand at the end of the year physical count
• B) keeps a continuous record of the physical quantities of inventory on hand
• C) does not maintain a continuous record of the physical quantities of inventory on hand
• D) does not maintain a continuous record of the cost of inventory on hand

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Definitions:

Retailers

Businesses that sell goods or commodities directly to consumers, often from physical locations or through online platforms.

Credit Policies

Credit policies refer to the guidelines and standards set by a business regarding the extension of credit to customers, including terms, conditions, and criteria for creditworthiness.

Monthly Rate of Return

The percentage gain or loss on an investment over a one-month period.

Variable Cost

Expenses that change in proportion to the activity of a business.