In addition to the cost-flow assumption,the system used to record movements in inventory also affects the determination of the cost of inventory.What are the systems commonly in use for recording the movement of inventory?
A) Continuous and cyclic.
B) ABC costing and overhead allocation.
C) Positive and periodic.
D) Periodic and perpetual.
E) None of the given answers.

Question

Quizplus · Accepted Answer

The two most common systems for recording inventory movements are periodic and perpetual. In the periodic system, inventory records are only updated periodically, usually at the end of an accounting period. In contrast, perpetual systems continuously update inventory records as goods are bought and sold. The perpetual system provides more real-time information on inventory levels and costs but also requires more resources to maintain. The choice of system can affect inventory cost calculations and reporting.

In Addition to the Cost-Flow Assumption,the System Used to Record