Which of the following statements is correct regarding either the perpetual or periodic inventory systems?
A)In a perpetual inventory system, the inventory account is not changed for each purchase during the accounting period.
B)In a perpetual inventory system, cost of goods sold is recorded at the time of each sale during the accounting period.
C)In a periodic inventory system, cost of goods sold is developed only from a comparison of beginning inventory and ending inventory.
D)In a periodic inventory system, the inventory account is increased for each purchase during the accounting perioD.Cost of goods sold is debited when inventory is sold when using a perpetual inventory system.

Question

Quizplus · Accepted Answer

In a perpetual inventory system, cost of goods sold is recorded at the time of each sale during the accounting period. This is because it continuously updates inventory records and is able to track cost of goods sold in real-time. In contrast, in a periodic inventory system, cost of goods sold is developed only from a comparison of beginning inventory and ending inventory, which is why option C is incorrect. Option A is also incorrect because in a perpetual inventory system, the inventory account is updated for each purchase during the accounting period. Option D is incorrect because the inventory account is not increased for each purchase in a perpetual inventory system; rather, the inventory account is decreased when a sale is made and cost of goods sold is recorded.

Which of the Following Statements Is Correct Regarding Either the Perpetual