When a Periodic Inventory System Is Used,________

question 38

Multiple Choice

When a periodic inventory system is used,________.

• A)an adjusting entry is needed to record the ending Merchandise Inventory account balance
• B)the process for closing the Income Summary and Owner's Withdrawals accounts differs from the process used in the perpetual inventory system
• C)beginning Inventory,Purchases,and Freight In accounts are closed via the Income Summary Account
• D)there is no need to take a physical count of inventory

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Definitions:

Break-even Point

The financial state at which total costs and total revenues are equal, indicating that a business or project is neither at a loss nor making a profit.

Shutdown Point

The price and output level at which a firm's revenue just covers its variable costs, below which it is better for the firm to temporarily cease operations.

Short-run Supply Curve

The short-run supply curve illustrates how the quantity of goods supplied by producers changes in response to a change in price over a short period, factoring in some fixed production costs.

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good or service changes as production volume varies.