Detailed Records of the Cost of Each Inventory Purchase and Sale

question 108

Multiple Choice

Detailed records of the cost of each inventory purchase and sale are not maintained under a

• A) perpetual inventory system.
• B) periodic inventory system.
• C) double entry accounting system.
• D) single entry accounting system.

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Definitions:

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from a country's central bank.

Reserve Requirement

This is a regulation set by central banks requiring banks to hold a certain percentage of deposits and notes in reserve, either in their vaults or on deposit with the central bank, as a precaution against bank runs.

Actual Reserves

The total amount of funds that a bank has in its reserve account plus any cash on hand, used to satisfy central bank requirements and handle withdrawals.

Excess Reserves

Bank reserves exceeding the reserve requirements set by the central bank, available for lending.