Which of the Following Is True Under the Perpetual Inventory

question 140

Multiple Choice

Which of the following is true under the perpetual inventory system?

• A) One entry is required to record a sales return.
• B) Cost of goods sold cannot be determined unless a physical inventory is taken.
• C) Two entries are required to record a sale.
• D) A separate account for purchases is required.

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Definitions:

Annual Sales

The total revenue a company generates from its operations over the course of a year.

Cash Expenses

Cash expenses are expenditures that a business or individual pays out in cash during a specified period, as opposed to non-cash expenses such as depreciation.

Planetary Gearset

A planetary gearset is a compact and efficient gear system used in transmissions, consisting of one central "sun" gear, multiple "planet" gears that orbit the sun gear, and a "ring" gear encompassing the planet gears.