Which of the Following Is a True Statement About Inventory

question 128

Multiple Choice

Which of the following is a true statement about inventory systems?

• A) Periodic inventory systems require more detailed inventory records.
• B) Perpetual inventory systems require more detailed inventory records.
• C) A periodic system requires cost of goods sold be determined after each sale.
• D) A perpetual system determines cost of goods sold only at the end of the accounting period.

---

Definitions:

Cumulative Losses

Total losses accumulated over a period, often reflecting a company's financial difficulties or losses in investment value.

Fair-Value Method

An accounting strategy used to measure and report the value of certain assets and liabilities on the basis of their actual or estimated fair market prices.

Fair Value

The income derived from the disposal of an asset or the payment required for the assignment of a liability in an organized exchange with market participants during the evaluation period.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control those policies, typically associated with ownership of 20% to 50% of voting stock.