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Perpetual versus Periodic Inventory Systems Graham Company is trying to select an inventory system. Below are several statements that pertain to inventory systems. Required: Select the inventory system, perpetual or periodic, that is best represented by each statement. If the statement applies to both systems, select "both". 1. Cost of goods sold is only determined at the end of the period after a physical count of inventory. 2. A physical count of inventory is performed. 3. Purchases of inventory are recorded in a Purchases account. 4. Cost of goods sold is determined continually during the period as sales are made. 5. Greater control over inventory is possible. 6. This inventory system is relatively inexpensive to operate.

Perpetual versus Periodic Inventory Systems Graham Company is trying to select an inventory system. Below are several statements that pertain to inventory systems. Required: Select the inventory system, perpetual or periodic, that is best represented by each statement. If the statement applies to both systems, select "both". 1. Cost of goods sold is only determined at the end of the period after a physical count of inventory. 2. A physical count of inventory is performed. 3. Purchases of inventory are recorded in a Purchases account. 4. Cost of goods sold is determined continually during the period as sales are made. 5. Greater control over inventory is possible. 6. This inventory system is relatively inexpensive to operate.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 3E: Perpetual versus Periodic Inventory Systems Graham Company is trying to select an inventory system....
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Perpetual versus Periodic Inventory Systems Graham Company is trying to select an inventory system. Below are several statements that pertain to inventory systems. Required: Select the inventory system, perpetual or periodic, that is best represented by each statement. If the statement applies to both systems, select "both". 1. Cost of goods sold is only determined at the end of the period after a physical count of inventory. 2. A physical count of inventory is performed. 3. Purchases of inventory are recorded in a Purchases account. 4. Cost of goods sold is determined continually during the period as sales are made. 5. Greater control over inventory is possible. 6. This inventory system is relatively inexpensive to operate.
Transcribed Image Text:Perpetual versus Periodic Inventory Systems Graham Company is trying to select an inventory system. Below are several statements that pertain to inventory systems. Required: Select the inventory system, perpetual or periodic, that is best represented by each statement. If the statement applies to both systems, select "both". 1. Cost of goods sold is only determined at the end of the period after a physical count of inventory. 2. A physical count of inventory is performed. 3. Purchases of inventory are recorded in a Purchases account. 4. Cost of goods sold is determined continually during the period as sales are made. 5. Greater control over inventory is possible. 6. This inventory system is relatively inexpensive to operate.
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