Which Inventory System Records a Change in the Inventory Account

question 157

Multiple Choice

Which inventory system records a change in the Inventory account every time goods are bought,sold or returned?

• A)Periodic
• B)Perpetual
• C)FOB Shipping Point
• D)FOB Destination

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Definitions:

Normal Balance

The side of an account (debit or credit) where increases to the account are recorded, depending on the account's nature.

Debit

An entry on the left side of an account, indicating an increase in assets or expenses or a decrease in liabilities, equity, or income.

Salary Expense Account

An account that tracks the total amount paid to employees for services rendered during a specific period.

Credit Entries

Accounting entries that increase liabilities or decrease assets, typically reflecting incoming payments or the granting of credit to a customer.