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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

LO2 Under the perpetual system of accounting for inventory, the current merchandise inventory and the cost of goods sold are not determined until the end of the accounting period when a physical inventory is taken.

To determine

Identify whether the given statement is true or false.

Explanation

Perpetual inventory system: Under this system of accounting for inventory, the inventory bought and sold is recorded when they are bought and sold. The up-to-date records are maintained for inventory and cost of goods sold. The records show the accurate figure at any point of time during the financial year.

Periodic inventory system: This is a system of accounting for inventory, where the quantity of inventory is recorded on a periodic basis. The up-to-date records are not maintained either for inventory or for cost of goods sold...

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