Choose the Correct Statement Concerning Periodic and Perpetual Inventory Systems

question 149

Multiple Choice

Choose the correct statement concerning periodic and perpetual inventory systems.

• A) Only the periodic system requires a physical count once per year
• B) The balance in the inventory account is known twice per fiscal year under the periodic system
• C) Both systems provide a means of estimating shrinkage loss
• D) Only the periodic system ever requires an adjusting entry at the end of each year after the physical count

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Definitions:

Withdraw

The act of removing funds from a bank account, or the process of pulling out of an agreement or investment.

Inherited

Property or assets received from an ancestor or predecessor typically through a will or succession.

Annuity Due

A series of equal payments made at the beginning of consecutive periods over a fixed length of time.

Interest Rate

The cost incurred by a borrower from a lender for the use of assets, represented as a proportion of the principal.