When a Company Uses the Periodic Inventory System in Accounting

question 39

Multiple Choice

When a company uses the periodic inventory system in accounting for its merchandise inventory, which of the following is true?

• A) Purchases are recorded in the cost of goods sold account.
• B) The inventory account is updated after each sale.
• C) Cost of goods sold is computed at the end of the accounting periods rather than at each sale.
• D) The inventory account is updated throughout the year as purchases are made.

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Definitions:

Otitis Externa

An inflammation or infection of the external auditory canal, also known as swimmer's ear.

Acetic Acid Eardrops

A solution used in the treatment of outer ear infections that works by restoring the normal acidic environment of the ear canal.

Swab

A small piece of absorbent material on a stick or wire base, used to collect samples of substances from various parts of the body for testing or cleansing.

Hydrogen Peroxide

A chemical compound used as an oxidizer, bleaching agent, and antiseptic.