When identical units of an item are purchased at different costs,

a. an inventory cost flow method must be used under a perpetual inventory system only.

b. an inventory cost flow method must be used under both a perpetual and a periodic inventory system.

c. an inventory cost flow method is not used under either a perpetual or a periodic inventory system.

d. an inventory cost flow method must be used under a periodic inventory system only?

Question

Business

Yurem Pena

27 June, 15:50

When identical units of an item are purchased at different costs,

a. an inventory cost flow method must be used under a perpetual inventory system only.

b. an inventory cost flow method must be used under both a perpetual and a periodic inventory system.

c. an inventory cost flow method is not used under either a perpetual or a periodic inventory system.

d. an inventory cost flow method must be used under a periodic inventory system only?

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Answers (1)

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Monica Best · Answer 1

When identical units of an item are purchased at different costs: an inventory cost flow method must be used under both a perpetual and a periodic inventory system.

A perpetual inventory system will update your inventory on hand after each sale or purchase of inventory is made. A periodic inventory system is updated periodically, meaning, a company will give a time period they would like their sales and purchases to update in and the system will perform that. Both systems are great for a business but it's their option of how they are generated.