Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

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Multiple Choice

Which of the following statements about cost of goods sold under perpetual and periodic inventory systems is FALSE?

Under the periodic inventory system, inventory records are updated after every purchase and sale.

The perpetual inventory system does not require physical inventory counts to determine cost of goods sold.

Under the perpetual inventory system, cost of goods sold is updated continuously with each sale.

Under the periodic inventory system, cost of goods sold is determined at the end of the accounting period.

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Verified step by step guidance

Understand the two inventory systems: Perpetual and Periodic. The perpetual inventory system continuously updates inventory records and cost of goods sold (COGS) with each transaction, while the periodic inventory system updates inventory and calculates COGS only at the end of the accounting period.

Analyze the statement: 'Under the periodic inventory system, inventory records are updated after every purchase and sale.' This is incorrect because the periodic system does not update inventory records continuously; it only updates them at the end of the accounting period.

Review the statement: 'The perpetual inventory system does not require physical inventory counts to determine cost of goods sold.' This is true because the perpetual system continuously tracks inventory and COGS, although physical counts may still be performed for accuracy.

Evaluate the statement: 'Under the perpetual inventory system, cost of goods sold is updated continuously with each sale.' This is correct because the perpetual system automatically adjusts COGS with every transaction.

Assess the statement: 'Under the periodic inventory system, cost of goods sold is determined at the end of the accounting period.' This is accurate because the periodic system calculates COGS after performing a physical inventory count at the end of the period.