Which of the Following Statements Is Correct

question 160

Multiple Choice

Which of the following statements is correct?

• A) Errors can only occur in a perpetual inventory system.
• B) Errors can only occur in a periodic inventory system.
• C) Errors can occur either in a perpetual or periodic inventory system.
• D) Errors will not occur if you are using a perpetual inventory system.

---

Definitions:

Merchandise

Goods that are bought and sold in the course of business operations, typically in a retail or wholesale context.

Credit Terms

The conditions under which a seller extends credit to a buyer, including the repayment time frame and any interest or discounts.

Trade Discount

A reduction in the listed price of a product or service, offered by a seller to a buyer in the business-to-business market.

Acid-Test Ratio

A financial metric that assesses a company's ability to pay off its short-term liabilities with its most liquid assets, excluding inventories.