Which one of the following statements is not true? a. A company using the periodic system does not maintain a continuous record of the physical quantities (or costs) of inventory on hand. b. In the periodic system, the costs of acquisition of inventory are debited directly to an inventory account. c. In the perpetual inventory system, recording in detailed subsidiary records can be in units only-not in peso costs. d. When the perpetual system is used, a physical count still needs to be made periodically.

Question

Business

Brendon Soto

24 May, 21:39

Which one of the following statements is not true? a. A company using the periodic system does not maintain a continuous record of the physical quantities (or costs) of inventory on hand. b. In the periodic system, the costs of acquisition of inventory are debited directly to an inventory account. c. In the perpetual inventory system, recording in detailed subsidiary records can be in units only-not in peso costs. d. When the perpetual system is used, a physical count still needs to be made periodically.

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Answers (1)

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Denise West · Answer 1

Option (b) is not true.

Explanation:

In a periodic system, the costs of acquisition of inventory are not directly debited to an inventory account; they are usually updated periodically. It is a system where the cost is added in the inventory account at the end of the period only, that is why option (b) is incorrect the cost of inventory or acquisitions are not added directly. Perpetual system is a technique where inventory acquisition cost indirectly added to an inventory account.