Which of the Following Is Not an Advantage of a Perpetual

question 52

Multiple Choice

Which of the following is not an advantage of a perpetual inventory system?

• A)assists in the prevention of stockouts
• B)requires less data processing effort than periodic systems
• C)maintains up-to-date inventory and cost of goods sold balances
• D)provides evidence of inventory shrinkage

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Definitions:

Fixed Expenses

Recurring costs that do not fluctuate with the level of production or sales volume, such as lease payments or salaries.

Contribution Margin Percentage

A measure showing what percentage of sales revenue is available to cover fixed costs and contribute to net income, calculated as (Sales - Variable Costs) / Sales.

After-Tax Profit

The profit a company has left after paying all its taxes.

Tax Rate

The proportion of income that the government taxes an individual or business.