A Company Using the Periodic Inventory System Does Not Record

question 46

True/False

A company using the periodic inventory system does not record the increase in cost of goods sold and decrease in inventory at the time of each sale in the sales journal.

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Definitions:

Inventory Item

A specific product or material that a company holds in stock with the intent to sell or use in the production process.

Inventory Value

The total cost or market value of all items held in stock by a business, including raw materials, work-in-progress, and finished goods.

Perpetual FIFO Method

is an inventory valuation technique assuming that the first items purchased (First In) are the first ones sold (First Out), continuously updated for each transaction.

Inventory Flow

The process by which inventory moves through a business, from purchase and storage to sale.