The Perpetual Method of Accounting for Inventory

question 94

Multiple Choice

The perpetual method of accounting for inventory

• A) Requires that a physical count of inventory be taken before the cost of goods sold can be determined with any reasonable degree of accuracy
• B) Is likely to be less expensive to maintain than a periodic inventory method
• C) Is not as helpful as a periodic method in providing management with timely reports about inventory quantities and costs
• D) Allows management to better estimate inventory losses from pilferage than does a periodic inventory method

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Definitions:

Preference

An individual's choice or inclination toward a particular option or thing over another.

Adjustment

The process of adapting or becoming accustomed to new conditions, situations, or environments.

Demands

Refers to the requirements or needs that must be met in various contexts, such as job demands in the workplace.

Environment

Environment refers to the surroundings or conditions in which a person, plant, or animal lives or operates, encompassing both natural and built settings.