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

Question

Quizplus · Accepted Answer

The periodic inventory system uses a purchases account to record the acquisition of inventory during the period, which is not used in the perpetual system. The perpetual system continuously updates inventory records, making it more suited to modern businesses with computerized inventory tracking, contrary to what is suggested in option D. Inventory controls are important for both systems, not just the periodic one, as suggested in option B. The accounting entries do vary between the two systems, especially in how and when inventory and cost of goods sold are updated, contradicting option C.

Which One of the Following Statements Concerning the Periodic and Perpetual