Which statement is correct about the system used to account for inventories?
A)Organizations must use the perpetual system to determine the amount of inventory and cost of goods sold.
B)The perpetual system is used to determine the amount of inventory and the periodic system is used to determine the cost of goods sold.
C)The perpetual and periodic system are both acceptable methods to use for inventory control.
D)The balance sheet under the perpetual system is different than that under the periodic system.

Question

Quizplus · Accepted Answer

The perpetual and periodic inventory systems are both widely accepted methods for inventory control and accounting. The choice between them depends on the business's operational needs, size, and the level of detail required for inventory tracking. The perpetual system updates inventory and cost of goods sold continuously with each sale or purchase, while the periodic system updates these figures at the end of an accounting period based on a physical inventory count.

Which Statement Is Correct About the System Used to Account