Under the Perpetual Inventory System an Inventory Variance Can Be

question 9

Multiple Choice

Under the perpetual inventory system an inventory variance can be calculated as the difference between:

• A) the periods purchases and ending inventory balance.
• B) the ledger balance of the inventory account and the total of the physical stocktake.
• C) inventory at start less inventory at end.
• D) an inventory loss cannot be calculated using the perpetual inventory system.

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Definitions:

Price Level

The encompassing average of prices for goods and services across the economy.

Output Increase

An increase in the production of goods and services in an economy over a period of time.

Monetary Rules

Guidelines used by central banks to manage the supply of money in an economy, aiming to achieve macroeconomic stability.

Active Approach

A strategy that involves frequent decision making and adjustments, often used in context with investing or policy making.