If Martson and Co. make the following journal entries, they are using the ________ inventory system.

Question

Quizplus · Accepted Answer

Martson and Co. are using the perpetual inventory system where inventory is continuously updated in the accounting records as purchases and sales are made. This is apparent from the fact that they are making journal entries for each transaction, including the purchase and sale of inventory. The other choices, FIFO and LIFO, refer to methods of determining cost of goods sold under either periodic or perpetual inventory systems.