Which of These Is Not an Advantage of the Perpetual

question 24

Multiple Choice

Which of these is not an advantage of the perpetual inventory system?

• A)Allows stock losses to be identified
• B)Provides reordering information
• C)Allows cost of sales to be calculated at any time
• D)A stock-take never has to be carried out

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Definitions:

Liquidation

Liquidation is the process of winding up a company's financial affairs by selling off assets to pay off creditors.

Payback Period

The length of time required to recover the cost of an investment.

Cash Inflows

Cash inflows refer to the money received by a business from various sources, including sales revenues, investment income, and financing.

IRR

The Internal Rate of Return, a financial metric used to estimate the profitability of investments by calculating the interest rate at which the net present value of all cash flows (both positive and negative) from a project equal zero.