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:

Citrus Juice

The liquid extract from citrus fruits like oranges, lemons, and grapefruits, rich in vitamins and often consumed for its health benefits.

Salad Dressing

A mixture of ingredients like oil, vinegar, herbs, and seasonings applied to salads to enhance their flavor.

Quarter's Profit

The net income or earnings generated by a company during a specific quarter of its fiscal year.

Partnership

An authorized commercial operation formed by two or more participants who equally handle management duties and share the profits.