Which One of the Following Statements Is Not True

question 121

Multiple Choice

Which one of the following statements is not true?

• A)The Inventory account is updated after every sale or purchase of merchandise under the perpetual inventory system.
• B)The Inventory account is updated only at the end of the accounting period under the periodic inventory system.
• C)The Cost of Goods Sold account is updated after each sale of merchandise under the periodic inventory system.
• D)The Purchases account is used only under the periodic inventory system.

Understand the effects of sales discounts, returns, and freight costs on transactions.

Compute adjustments for inventory shrinkage and the cost of merchandise purchased.

Understand the accounting treatment of expenses and revenue recognition for a merchandising business.

Understand the closure of accounts and calculation of financial ratios in accounting.

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Definitions:

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way possible.

Marginal Rate

Often refers to the marginal rate of substitution or marginal rate of transformation in economics, indicating the rate at which one good can be substituted for another.

Transformation

The process of converting inputs into outputs, often relating to the change of raw materials into finished products in the context of production.

Opportunity Cost

The rejection of potential benefits from alternative propositions when favoring one.