Which statement is true about perpetual inventory system?

Which statement is true about perpetual inventory system?

Which statement is true in a perpetual inventory system? FIFO cost of goods sold will be the same as in a periodic inventory system.

What is a perpetual inventory system?

A perpetual inventory system is an inventory management method that records when stock is sold or received in real-time through the use of an inventory management system that automates the process. A perpetual inventory system will record changes in inventory at the time of the transaction.

Which statement about a perpetual inventory system is true LIFO cost?

Which statement is true in a perpetual inventory system? a- LIFO cost of goods sold will be the same as in a periodic inventory system.

Which of the following is a characteristic of a perpetual inventory system?

Which of the following are characteristics of a perpetual inventory system? Purchases of inventory are recorded to the inventory account. Management knows how much inventory is on hand at all times. The computer tracks inventory upon a sale and the cost of goods and inventory are immediately updated.

What is the definition of perpetual inventory quizlet?

Perpetual inventory system. A inventory system that continuously records movements of inventory as it enters and leaves the firm. Stock Cards are used for each item of inventory.

What is perpetual inventory system and its advantages?

A perpetual inventory system, or a continuous inventory system, is an inventory control system that allows users to keep a more accurate account of inventory on hand. It became popular after the 1970s when the use of computers became more widespread. Inventory on hand is updated whenever a transaction is made.

What accounts are used in a perpetual inventory system?

The journal entries used when bookkeeping in the perpetual inventory system are different compared to the ones used in a periodic system.

• To record inventory purchases: Inventory. Debit. …
• To record inventory sales: Accounts Receivable/Cash. Debit. …
• To record theft/breakage: Loss of Inventory Expense. Debit.

When a perpetual inventory system is used which of the following is a purpose of taking a physical inventory?

Companies that use a perpetual inventory system must take a physical inventory to determine inventory on hand on the balance sheet date and to determine cost of goods sold for the accounting period. 59.