A Perpetual Inventory System Is Preferable to a Periodic System

question 82

Multiple Choice

A perpetual inventory system is preferable to a periodic system if adequately controlled and maintained because

• A)it requires that a full inventory count be taken at year-end by all warehouse employees.
• B)it allows management to calculate cost of goods sold at year end.
• C)it provides information to management about inventory that approaches real-time.
• D)it better controls the receipt of goods.

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Definitions:

Gasoline

A flammable liquid derived from petroleum, predominantly used as fuel in internal combustion engines.

Flow Variable

A quantity that is measured over a specified period of time, contrasting with stock variables which are measured at one specific time.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including currency, coins, and balances held in checking and savings accounts.

Household Debt

The total amount of debt, including mortgages, credit cards, loans, etc., owed by all members of a household.