Merchandising companies that are small and do not use a perpetual inventory system may elect to use:
A)A physical inventory system.
B)A periodic inventory system.
C)An inventory shrinkage method.
D)An inventory subsidiary ledger system.

Question

Quizplus · Accepted Answer

Small merchandising companies that do not use perpetual inventory systems may find it cost-effective to use a periodic inventory system. This system involves physically counting inventory at regular intervals, such as monthly or quarterly, to determine the quantity and value of inventory on hand. This method can be less expensive and less time-consuming than maintaining a perpetual inventory system, which requires more frequent and detailed tracking of inventory levels. The other options listed (A, C, and D) can be used in conjunction with a periodic inventory system, but do not replace the need for one.

Merchandising Companies That Are Small and Do Not Use a Perpetual