Which of the following statements is correct?
A) The periodic inventory system provides superior managerial information and internal control.
B) The perpetual inventory system is simpler and less expensive than the periodic inventory system.
C) Profit and inventory values are the same under the perpetual inventory system and the periodic inventory system,as long as the basic data do not show any inflation or deflation.
D) The perpetual inventory system is only used in small companies.

Question

Quizplus · Accepted Answer

This statement is correct according to accounting principles. Profit and inventory values will be the same under both perpetual and periodic inventory systems if there is no inflation or deflation in basic data. Option A is incorrect because the perpetual system provides more detailed and up-to-date information. Option B is incorrect because the perpetual system requires more technology and ongoing maintenance, which makes it more expensive. Option D is incorrect because the perpetual inventory system is used in both small and large companies.

Which of the Following Statements Is Correct