Which of the Following Is a True Statement About Inventory

question 128

Multiple Choice

Which of the following is a true statement about inventory systems?

• A) Periodic inventory systems require more detailed inventory records.
• B) Perpetual inventory systems require more detailed inventory records.
• C) A periodic system requires cost of goods sold be determined after each sale.
• D) A perpetual system determines cost of goods sold only at the end of the accounting period.

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Definitions:

Lower-Of-Cost-Or-Market

The lower-of-cost-or-market rule is an accounting principle requiring companies to record the cost of inventory at the lower value between its original cost and current market price.

Market Decline

A reduction in the overall value of the market, often indicated by decreases in stock prices and market indexes.

Lower Of Cost

is an accounting principle requiring inventory to be recorded at the lower of either its historical cost or current market value, ensuring assets are not overstated.

Market

A venue where buyers and sellers meet to exchange goods, services, or financial instruments.