The Periodic Inventory System Is Used Most Commonly by Companies

question 163

Multiple Choice

The periodic inventory system is used most commonly by companies that sell

• A) low-priced, high-volume merchandise.
• B) high-priced, high-volume merchandise.
• C) high-priced, low-volume merchandise.
• D) high-priced, low and high-volume merchandise.

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Definitions:

Finished Goods Inventory

The total value of all completed products that are ready for sale but have not yet been sold.

Direct Materials Budget

An estimation of the raw materials required for production and their anticipated costs, aiding in financial planning and control.

Cash Payments

Cash payments are transactions in which money is transferred from one party to another to settle a debt or purchase goods or services.

Credit Sales

Sales where the customer is allowed to make payment at a later date, extending credit to the buyer.