Companies with Perpetual Inventories Need Not Take Physical Inventory Counts

question 112

True/False

Companies with perpetual inventories need not take physical inventory counts because inventory amounts are perpetually available.

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Definitions:

Warranty Repairs

Services offered for free or at a reduced cost to fix defects in products covered under a warranty period.

Product Warranty Expense

Costs that a company incurs for repairing, replacing, or servicing products under warranty.

Sales

The total revenue generated from the sale of goods or services by a company during a specified period.

Warranty Obligations

Commitments made by a seller to repair, replace, or refund products that fail within a certain period.