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:

Invisible Hand

A metaphor used by economist Adam Smith to describe the self-regulating behavior of the marketplace.

Adam Smith

An 18th-century Scottish economist and philosopher, often considered the father of modern economics, known for his theories on free markets, capitalism, and the "invisible hand."

Stakeholder Model

A framework that outlines the importance of considering all stakeholders in decision-making processes, not just shareholders.

Stakeholders

Individuals or groups that have an interest, stake, or claim in the actions and overall performance of a company, including employees, customers, suppliers, and shareholders.