A system which involves recording purchases of raw materials inventory, recording all the components of work in process, and recording the total cost of sales for products completed and sold is referred to as:
A)A perpetual inventory system
B)The accounting information system
C)A periodic inventory system
D)None of the above

Question

Quizplus · Accepted Answer

The description given in the question corresponds to a perpetual inventory system, which is a method of tracking inventory balances continuously throughout the accounting period. This involves updating inventory records for each purchase, sale, and production activity. Therefore, option A is the correct answer. Option B refers to the broader system that captures all financial transactions in an organization, including inventory activities. Option C refers to a periodic inventory system, where inventory balances are only updated at the end of an accounting period. Option D is incorrect as the description matches option A.

A System Which Involves Recording Purchases of Raw Materials Inventory