Which of the Following Statements Is Correct

question 9

Multiple Choice

Which of the following statements is correct?

• A) The periodic method of accounting for inventory will always result in a higher closing inventory balance than the perpetual method.
• B) The periodic method of accounting for inventory will always result in a lower closing inventory balance than the perpetual method.
• C) Closing inventory will always be the same under the periodic and perpetual methods.
• D) the relationship between the closing inventory balance under the periodic and perpetual methods will depend on whether the FIFO or weighted average method is used to value inventory.

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Definitions:

Specialization And Trade

An economic strategy where individuals or groups focus on a narrow area of expertise to increase efficiency and trade with others for different goods or services.

Protectionism

Economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations to protect domestic industries from foreign competition.

International Trade

The exchange of goods and services between countries, which allows for greater diversity of products and economic interdependence.