The Perpetual Inventory System Is a System Which

question 30

Multiple Choice

The perpetual inventory system is a system which:

• A) updates inventory only at the end of each period.
• B) uses only LIFO method.
• C) needs a physical inventory taken.
• D) Both A and B are correct.

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Definitions:

Perpetual Inventory System

A method of inventory management where updates to inventory records are made in real-time following every transaction.

Cost of Goods Sold

Cost of goods sold (COGS) represents the direct costs attributable to the production of the goods sold by a company.

Periodic Inventory System

An inventory system that updates inventory balances at the end of a period, relying on physical counts to measure stock levels.

Detailed Records

Comprehensive, accurate documentation of transactions, activities, or events, maintained for reference and compliance.