What Is the Major Difference Between a Periodic and Perpetual

question 52

Multiple Choice

What is the major difference between a periodic and perpetual inventory system?

• A) Under the periodic inventory system, the purchase of inventory will be debited to the Purchases account.
• B) Under the periodic inventory system, no journal entry is recorded at the time of the sale of inventory for the cost of the inventory.
• C) Under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the accounting period.
• D) All of the answers are correct.

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single entity can dictate prices.

Price Taker

refers to a market participant who does not have the ability to influence prices and must accept the market price as given.

Competitive Market

A market structure characterized by a large number of buyers and sellers where no single entity can dictate prices.

Average Revenue

The amount of revenue a company receives per unit of output sold, calculated by dividing total revenue by the quantity of goods or services sold.