Chapter 4, Problem 1SE

Inventory methods (Learning Objective 2) 5-10 min.

The following characteristics are related to periodic inventory and/or perpetual inventory systems.

1. a. A physical count of goods on hand at year end is required.
2. b. Inventory records are continuously updated.
3. c. Purchases of inventory are recorded in an asset account at the time of purchase.
4. d. Bar code scanners are often used.
5. e. The cost of goods sold must be calculated at the end of the year.

Match each characteristic with one of the following:

1. a. Periodic inventory
2. b. Perpetual inventory
3. c. Both periodic and perpetual inventory
4. d. Neither periodic nor perpetual inventory