Under the Periodic Inventory System

question 105

Multiple Choice

Under the periodic inventory system

• A)the cost of each item is recorded in the Merchandise Inventory account when it is purchased.
• B)when an inventory item is sold,its cost is transaferred to the Cost of Goods Sold account.
• C)the balance of the Merchandise Inventory account equals the cost of goods on hand.
• D)the balance of the Merchandise Inventory account is only accurate on the balance sheet date.

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Definitions:

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A legal principle that requires certain types of contracts to be in writing and signed by all parties involved in order to be enforceable.

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A verbal agreement between parties that is legally binding, though not in written form.

Enforceable

Capable of being imposed or upheld by legal process or action.

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A job guarantee in which an employee can expect to remain employed in their position for their entire working life.