Describe whether the given statement is true or false.
Answer to Problem 1TF
False.
Explanation of Solution
Perpetual inventory system: The method or system of maintaining, recording, and adjusting the inventory perpetually throughout the year, is referred to as perpetual inventory system.
Periodic inventory system: The method or system of recording the transactions related to inventory occasionally or periodically are referred to as periodic inventory system.
In this case, Company T uses a perpetual inventory system to record its inventories (finished goods, work in process, and materials).
Therefore, the given statement “Company T uses a periodic inventory system” is false.
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