Which of the Following Statements Regarding a Periodic Inventory System

question 30

Multiple Choice

Which of the following statements regarding a periodic inventory system is incorrect?

• A) A periodic inventory system is simpler than a perpetual inventory system.
• B) A periodic inventory system works well for small businesses in which inventory costs can be controlled by visual inspection.
• C) The only way to determine the ending merchandise inventory and cost of goods sold in a periodic inventory system is to take a physical inventory.
• D) The various inventory costing methods are not used in a periodic inventory system.

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Definitions:

Marital Problems

Issues or conflicts arising between spouses that can affect the stability and health of the marriage.

Adverse Selection

A situation where asymmetric information results in high-risk individuals being more likely to participate in a contract, often seen in insurance markets.

Insurance

A financial product that provides compensation for specific losses or damages in exchange for regular payments, known as premiums.

Insured Risk

A risk that has been covered by an insurance policy, transferring the financial burden of a potential loss from the insured to the insurer.