Under a Perpetual Inventory System

question 109

Multiple Choice

Under a perpetual inventory system:

• A) there must be a physical count to determine the amount of the ending inventory.
• B) there must be a physical count to determine the cost of goods sold.
• C) the inventory records must be updated manually.
• D) it can be readily determined if there is a sufficient supply of inventory on hand.

---

Definitions:

Legal Liability

The responsibility imposed by law to compensate for or rectify any harm, loss, or damage one's actions or decisions have caused to others.

Sales Taxes

These are taxes imposed by governments on the sale of goods and services.

Sick Pay

Compensation paid by employers to employees during periods when they are unable to work due to illness.

Cumulative Preferred Stock

Cumulative preferred stock is a type of preferred stock that accumulates dividends in case of non-payment in any period, requiring these dividends to be paid out before any dividends to common stockholders.