Under a periodic inventory system,the cost of merchandise on hand at the end of the year is determined by a physical count of the inventory.

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Under a periodic inventory system, the cost of merchandise on hand at the end of the year is determined by a physical count of the inventory. This is because the system does not track inventory levels in real-time, so a physical count is necessary to determine the quantity and cost of items on hand.

Under a Periodic Inventory System,the Cost of Merchandise on Hand