Which one of the following statements concerning the periodic and perpetual inventory systems is true?
A) The periodic system uses a purchases account.
B) None of the accounting entries vary between the two systems.
C) Inventory controls are only needed for the periodic inventory systems.
D) Due to advances in computers, many businesses recently have begun to use the periodic inventory system.

Question

Quizplus · Accepted Answer

The periodic system uses a purchases account to record the purchase of inventory, while the perpetual system uses a separate inventory account to record changes in inventory levels. The other statements are false or misleading. Both systems require inventory controls, and the perpetual system is actually more common in modern business due to the use of sophisticated inventory management software.

Which One of the Following Statements Concerning the Periodic and Perpetual