Practice Question 04 E3 The increased use of computerized systems has increased

Question

Practice Question 04 E3 The increased use of computerized systems has increased the use of the perpetual, not the periodic inventory system. Which of the following statements about a periodic inventory system is true? Companies determine cost of goods sold only at the end of the accounting period. D Companies continuously maintain detailed records of the cost of each inventory purchase and sale. 0 The periodic system provides better control over inventories than a perpetual system. o The increased use of computerized systems has increased the use of the periodic system. LINK TO TEXT

Explanation / Answer

The correct choice is : - Companies determine cost of goods sold only at the end of the accounting period.

Explanation : - In a periodic inventory system, detailed inventory records of the goods on hand are not kept throughout the period. The cost of goods sold is determined only at the end of the accounting period—that is, periodically. At that time, a physical inventory count is taken to determine the cost of goods on hand.

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