Question

Which one of the following statements is not true? a. A company using the periodic system does not maintain a continuous record of the physical quantities (or costs) of inventory on hand. b. In the periodic system, the costs of acquisition of inventory are debited directly to an inventory account. c. In the perpetual inventory system, recording in detailed subsidiary records can be in units only-not in peso costs. d. When the perpetual system is used, a physical count still needs to be made periodically.

Answer 1

Answer:

Option (b) is not true.

Explanation:

In a periodic system, the costs of acquisition of inventory are not directly debited to an inventory account; they are usually updated periodically.  It is a system where the cost is added in the inventory account at the end of the period only, that is why option (b) is incorrect the cost of inventory or acquisitions are not added directly. Perpetual system is a technique where inventory acquisition cost indirectly added to an inventory account.

Answer 2

Incorrect statements are:

b) In a periodic system, the cost of inventory is directly debited to the inventory account.

The statement is wrong because by using a periodic system the company can only know the amount of inventory at the end of the period.

Further explanation

In running a company, there must be a name for the recording system. For example in a trading company, the company will implement a system for recording merchandise inventory. Merchandise inventory recording system is carried out to facilitate a company in managing the purchase and sale transactions made.

There are two types of inventory recording methods that can be chosen by the company in conducting its business, namely the perpetual recording method and the periodic recording method. But in this discussion, we will discuss periodic records.

The periodic recording method is a simple and easy method of recording. In this method, the recording of purchases and sales are distinguished from one another. The recording of the purchase will be recorded by debiting the purchase account and crediting the cash or debit account. Whereas the recording of sales will be recorded by debiting the cash or receivable account and crediting the sales account.

Companies that apply the periodic recording method will find it more difficult to know the amount of inventory at a certain time. The company can only know the amount of inventory at the end of the period which is also called the amount of inventory of end goods by doing physical calculations or stocktaking on the amount of inventory of finished goods. Items that are suitable to be applied in the periodic recording method are goods with a relatively cheaper sale value but which are sold quite often.

In this method, the end of period adjustment is done by closing the inventory of initial goods and then recording the inventory of final goods that have been previously physically calculated. To determine the final balance in the periodic recording method, a calculation can be made, namely the calculation of the physical value of inventory or stock-taking, multiplied by the cost of goods sold in units of goods. The cost of goods sold can be obtained from the inventory data of initial and final inventory data.

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Periodic Inventory Method brainly.com/question/8189650, brainly.com/question/13465299

Details

Class: High School

Subject: Bussines

Keyword: Periodic Inventory Method