Using the periodic system of inventory:
A) Gives the same results as a perpetual system when FIFO is applied but without some of the extra detail.
B) Is much more cost effective as a perpetual system requires a computer.
C) Does not require a stock take each year and is therefore more accurate.
D) Accurately reports all stock movements which assists with decision-making.
E) All of the given answers.

Question

Quizplus · Accepted Answer

The periodic system of inventory can give the same results as a perpetual system when FIFO (First In, First Out) is applied, but without the extra detail.

Answer: D 
 While the periodic system of inventory may not accurately report all stock movements, a perpetual system would. However, the periodic system can still provide useful information for decision-making.

Using the Periodic System of Inventory