Question

Which of the following is a true statement about inventory systems?A)Periodic inventory systems require more detailed inventory records.B)Perpetual inventory systems require more detailed inventory records.C)A periodic system requires cost of goods sold be determined after each sale.D)A perpetual system determines cost of goods sold only at the end of the accounting period.

Answer 1

Answer:

B)Perpetual inventory systems require more detailed inventory records.

Explanation:

Under the Perpetual inventory system, every time a good is sold the cost of goods sold (COGS) needs to be determined. That is the reason the details are so important.

Many times it varies because different units in inventory were purchased at different prices and times. Inflation might be a factor the prices changes too.

However, in the Periodic inventory system, (COGS) is determined at the end of the accounting period, so the person in charge of keeping the records usually checks the Inventory account at the end of the year to know COGS.