If a Company Uses a Perpetual Inventory System, It Will

question 126

Multiple Choice

If a company uses a perpetual inventory system, it will maintain all the following accounts except:

• A)cost of goods sold.
• B)inventory.
• C)sales.
• D)purchases.

---

Definitions:

Variable Costing

A cost system that excludes fixed costs from product costs and writes off all fixed costs against income in the year that the costs are incurred. Also called direct costing.

Step-fixed Costs

Expenses that remain constant for a set level of production or output, but can change when a certain threshold is crossed.

Inflationary Price Increase

The rise in prices of goods and services over time, typically due to an increase in the money supply or demand outpacing supply.

Reconciled

The process of making sure that two sets of records (usually the balances of two accounts) are in agreement.