The Primary Difference Between the Periodic and Perpetual Inventory Systems

question 240

Multiple Choice

The primary difference between the periodic and perpetual inventory systems is that a

• A) periodic system determines the inventory on hand only at the end of the accounting period
• B) periodic system keeps a record showing the inventory on hand at all times
• C) periodic system provides an easy means to determine inventory shrinkage
• D) periodic system records the cost of the sale on the date the sale is made

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Definitions:

Percentage

A way of expressing a number as a fraction of 100, denoted using the symbol "%".

Unit Variable Cost

The cost attributed to each unit produced, varying with the level of output.

Selling Price

The amount of money for which a product or service is sold to the customer.

Contribution Margin

The selling price per unit, minus the variable cost per unit, which helps in determining the profitability of products.