Which of the Following Is True Regarding Perpetual Inventory Systems

question 48

Multiple Choice

Which of the following is true regarding perpetual inventory systems?

• A) Detailed accounting records must be maintained so that changes in inventory accounts can be posted when the transactions occur.
• B) An end-of period physical inventory count is required to determine the changes in inventory accounts.
• C) Detailed accounting records must be maintained so that changes in inventory accounts can be posted in a purchases account.
• D) More accounting time is required at the end of the period to update the inventory accounts for the period's changes.

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Definitions:

Useful Life

Useful life is the estimated duration of time that an asset is expected to be usable for the purpose it was acquired, often influencing depreciation calculations.

Accumulated Depletion

The total amount of natural resources cost that has been allocated as an expense due to the physical removal or consumption of the natural resource.

Contra-Asset Account

An account that is used to reduce the value of a related asset, e.g., allowance for doubtful accounts reduces accounts receivable.

Natural Resources

Assets that occur in nature, such as minerals, forests, and water, often subject to depletion over time through use.