Which of the Following Does NOT Correctly Describe a Periodic

question 221

Multiple Choice

Which of the following does NOT correctly describe a periodic inventory system?

• A)Cost of goods sold is calculated every time a sale is made.
• B)Cost of goods sold is a residual amount.
• C)Assuming a FIFO cost flow, cost of goods sold would equal those that calculated by the
• Perpetual system.
• D)Inventory and cost of goods sold must be updated at the end of the period.
• Inventory 8 - 17

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Definitions:

Perfected

In legal and financial contexts, it refers to the completion of all necessary legal steps to validate a security interest against third parties.

Security Agreement

A legal contract in which a borrower pledges an asset as collateral for a loan, securing the interest of the lender.

Security Interest

A security interest is a legal claim or lien on collateral, granted to a lender or creditor to secure repayment of a debt or loan.

Perfected

In legal terms, it refers to the completion of all required steps to enforce a security interest or lien against third parties, particularly after default.