Which Statement Is Correct About the System Used to Account

question 44

Multiple Choice

Which statement is correct about the system used to account for inventories?

• A)Organizations must use the perpetual system to determine the amount of inventory and cost of goods sold.
• B)The perpetual system is used to determine the amount of inventory and the periodic system is used to determine the cost of goods sold.
• C)The perpetual and periodic system are both acceptable methods to use for inventory control.
• D)The balance sheet under the perpetual system is different than that under the periodic system.

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Definitions:

Strategic Financial

Pertains to the managing of a corporation's finances with a long-term perspective, focusing on investment decisions, financial planning, and policies that affect the company's financial health and strategic goals.

Jointly Controlled Entity

An entity that is managed and operated under a joint control agreement by two or more parties.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Trust

A fiduciary relationship in which one party, known as a trustee, holds property for the benefit of another party, known as a beneficiary.