Under the Periodic Inventory System,which of the Following Statements Is

question 235

Multiple Choice

Under the periodic inventory system,which of the following statements is correct?

• A) During the period, the business records the cost of all inventory bought in the Merchandise Inventory account.
• B) Purchase Returns and Allowances and Purchase Discounts are contra expense accounts.
• C) Freight in is debited to the Purchases account.
• D) Purchase discounts are recorded as credits to the Purchases account.

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Definitions:

Unsystematic Risk

Also known as specific risk, it refers to the risk associated with individual assets, distinct from the market's overall movements.

Systematic Risk

The inherent risk associated with the entire market or market segment, which cannot be mitigated through diversification.

Beta Coefficient

An indicator of how much a stock's price fluctuates compared to the entire market.

Volatility

Denotes the degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns, indicating the stability or instability of markets.