When Using a Perpetual Inventory System,a Business Will Debit Inventory

question 73

True/False

When using a perpetual inventory system,a business will debit inventory and credit cost of goods sold each time a sale is recorded.

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Definitions:

Depreciation

Depreciation is the accounting method of allocating the cost of a tangible asset over its useful life.

Net Working Capital

A financial indicator showing the disparity between a company's existing assets and its immediate debts.

Long-Term Bank Credit

A type of financing provided by banks that has a maturity date longer than one year, used for funding significant investments or operations.

Total Cash Flow

The complete sum of cash flowing in and out of a company, particularly influencing its ability to meet short-term obligations.