Which of the Following Is NOT an Advantage of the Perpetual

question 2

Multiple Choice

Which of the following is NOT an advantage of the perpetual over the periodic inventory method?

• A) A continuous record of inventory on hand is furnished.
• B) Inventory theft is more likely to be detected.
• C) Recording of inventory is less costly to monitor.
• D) The perpetual inventory system provides a continuous record of cost of goods sold.

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Definitions:

Contra-Asset Account

An account on a company's balance sheet that reduces the value of a related account.

Bank Reconciliations

The process of matching and balancing figures in accounting records with those presented in a bank statement to ensure they are in agreement and accurate.

Outstanding Checks

Checks that have been written and recorded in the accounting books but have not yet been cashed or cleared by the bank.

Non-Sufficient Funds

A situation where a bank account does not have enough money to cover a transaction, resulting in a failed payment.