For Companies That Use a Perpetual Inventory System, All of the Following

question 136

Multiple Choice

For companies that use a perpetual inventory system, all of the following are purposes for taking a physical inventory except

• A)to check the accuracy of the records.
• B)to determine the amount of wasted raw materials.
• C)to determine losses due to employee theft.
• D)to determine ownership of the goods.

---

Definitions:

Common Shares

Common shares represent units of ownership in a company, giving shareholders voting rights and a portion of the profits through dividends, subject to corporate performance.

Accrued Interest Expense

Interest expense that has been incurred but not yet paid during an accounting period.

Installment Note

A debt instrument that requires a series of payments over time until the total debt is paid off.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a predetermined price.