Which of the following does NOT correctly describe a periodic inventory system?
A)Cost of goods sold is calculated every time a sale is made.
B)Cost of goods sold is a residual amount.
C)Assuming a FIFO cost flow, cost of goods sold would equal those that calculated by the perpetual system.
D)Inventory and cost of goods sold must be updated at the end of the period.

Question

Quizplus · Accepted Answer

The statement "Cost of goods sold is calculated every time a sale is made" is incorrect for a periodic inventory system. In a periodic inventory system, the cost of goods sold is calculated at the end of the period based on the beginning inventory, purchases, and ending inventory. Therefore, the cost of goods sold is not calculated every time a sale is made.

Which of the Following Does NOT Correctly Describe a Periodic