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 inventory systems continuously updates inventory records for each purchase and sale of inventory?

Periodic inventory system

Specific identification method

Perpetual inventory system

Just-in-time inventory system

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Verified step by step guidance

Understand the concept of inventory systems: Inventory systems are methods used by businesses to track and manage their inventory levels. The two primary systems are the periodic inventory system and the perpetual inventory system.

Learn about the periodic inventory system: This system updates inventory records at specific intervals, such as at the end of an accounting period. It does not continuously track inventory changes during the period.

Understand the perpetual inventory system: This system continuously updates inventory records for each purchase and sale of inventory. It provides real-time tracking of inventory levels and is often supported by technology like barcode scanners and inventory management software.

Compare the perpetual inventory system with other methods: The specific identification method is a way to track individual items of inventory, but it is not an inventory system. The just-in-time inventory system is a strategy to minimize inventory levels, not a system for tracking inventory.

Conclude that the perpetual inventory system is the correct answer: Based on the definitions and characteristics, the perpetual inventory system is the one that continuously updates inventory records for each purchase and sale of inventory.