Which of the following is true under a periodic system:
A)A COGS expense is recognized each time a sale is made
B)The inventory account is not updated with each purchase.
C)Inventory shrinkage is easily identified.
D)This system can be costly to implement.

Question

Quizplus · Accepted Answer

Under a periodic system, the inventory account is not updated with each purchase. Instead, the cost of goods sold (COGS) is recognized only at the end of the period based on a physical inventory count. This makes option A incorrect. Option C is also incorrect as inventory shrinkage may not be easily identified without regular inventory updates. Option D may be true, but it is not a characteristic of a periodic system.

Which of the Following Is True Under a Periodic System