Differentiate Between the Record Keeping Required for Sales and Cost

question 201

Essay

Differentiate between the record keeping required for sales and cost of goods sold under a perpetual versus a periodic inventory system.

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Definitions:

Operating Expenses

The costs associated with the day-to-day operations of a business, not including the cost of goods sold.

Fixed Assets

Long-term tangible assets used in the operations of a business that are not expected to be consumed or converted into cash within a year.

Trademark

A trademark is a recognizable sign, design, or expression which identifies products or services of a particular source from those of others.

Patent

Legal protection granted by the government to an inventor, giving them exclusive rights to use, produce, and sell their invention for a certain period of time.