The Perpetual Inventory System Keeps a Running Record of Inventory

question 20

True/False

The perpetual inventory system keeps a running record of inventory and cost of sales.

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Definitions:

Prepaid Insurance

Insurance premiums paid in advance by a company, which are recorded as an asset on the balance sheet until the coverage period lapses.

Asset Accounts

Accounts that represent resources owned or controlled by a company that have future economic value.

Accounts Payable

Financial obligations of a company towards creditors, resulting from goods and services acquired on a credit basis.

Unearned Revenue

Money received by a company for goods or services that have not yet been delivered or performed, considered a liability until the income is earned.