A Perpetual Inventory System Offers Which of the Following Advantages

question 72

Multiple Choice

A perpetual inventory system offers which of the following advantages?

• A)This system helps to determine if there is a sufficient supply of inventory on hand to fill customer orders, just by reviewing the inventory records.
• B)This system is more expensive than a periodic system.
• C)This system is used for inexpensive goods.
• D)Inventory balances have to be counted to be accurate.

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Definitions:

Marginal Revenue

The boost in income achieved by selling one more unit of a product or service.

Marginal Cost

The growth in aggregate expenditure brought about by generating an extra unit of a product or service.

Economic Profit

The difference between total revenue and total costs, where costs include both explicit and implicit costs.

Competitive Firm

A company that operates in a market where it must take the prevailing market price as given because the firm's individual sales do not significantly affect the market price.