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:

Market Share

The portion of a market controlled by a particular company, often expressed as a percentage of total sales in that market.

Herfindahl Index

An indicator of how concentrated a market is, calculated by squaring the market shares of all firms in the market and adding these squared values together.

Four-Firm Concentration Ratio

A measure indicating the total market share held by the four largest firms within an industry, used as an indicator of market competitiveness.

Industry Sales

The total revenue generated by all companies within a specific sector or industry.