Below Is a List of Statements Relating to Inventory Systems

question 152

Essay

Below is a list of statements relating to inventory systems.Each statement describes a characteristic of the periodic and/or perpetual systems.Some statements relate to only one system,some statements relate to both systems,and some relate to neither system.Enter check marks in the blanks to indicate the appropriate system: (a statement may require one,two,or no check marks). $$\begin{array} { | l | l | l | } \hline & \text { Perpetual } & \text { Periodic } \\\hline & \text { Inventory } & \text { Inventory } \\\hline & \text { System } & \text { System } \\\hline \begin{array} { l } \text { (a) When an item is sold, two concurrent accounting } \\\text { entries are made for different amounts. }\end{array} & & \\\hline \begin{array} { l } \text { (b) Cost of goods sold is determined as a residual } \\\text { amount. }\end{array} & & \\\hline \begin{array} { l } \text { (c) At the end of the accounting period, two inventory } \\\text { entries usually must be made in the accounts. }\end{array} & & \\\hline \text { (d) A physical inventory count rarely, if ever, is taken. } & & \\\hline \begin{array} { l } \text { (e) More effective inventory control (such as of theft) is } \\\text { possible. }\end{array} & & \\\hline \begin{array} { l } \text { (f) The amount (balance) in the inventory account } \\\text { throughout the accounting period usually is the } \\\text { beginning inventory amount. }\end{array} & & \\\hline \begin{array} { l } \text { (g) Each purchase is debited to the inventory account } \\\text { throughout the accounting period. }\end{array} & & \\\hline \begin{array} { l } \text { (h) Inventory amounts are determined by actual count. }\end{array} & \\\hline \begin{array} { l } \text { (i) Purchases of merchandise are not debited to the } \\\text { inventory account throughout the period. }\end{array} & & \\\hline \begin{array} { l } \text { (j) The method which usually involves more detailed } \\\text { record keeping. }\end{array} & & \\\hline \begin{array} { l } \text { (k) Inventory amounts are determined from the detailed } \\\text { inventory records. }\end{array} & & \\\hline \begin{array} { l } \text { (1) Only one accounting entry is made when an item is } \\\text { sold. }\end{array} & & \\\hline \begin{array} { l } \text { (m) Only one accounting entry is made to record a } \\\text { purchase of merchandise. }\end{array} & & \\\hline \begin{array} { l } \text { (n) Only one accounting entry is made to record a } \\\text { purchase of merchandise. }\end{array} & & \\\hline\end{array}$$

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Definitions:

Population

The entire group of individuals or items that is the subject of a statistical analysis.

Average Age

A statistical measure that summarizes the central tendency of ages within a given group by dividing the sum of all ages by the number of individuals.

Random

An event or action occurring without any discernible pattern or predictability, often used in statistical sampling and assignments.

Census

A complete enumeration of a population or group, often used to gather demographic, social, and economic data.