When the average cost method is applied in a periodic inventory system,
A)the sale of goods during the year will change the unit cost used for calculating ending inventory.
B)an average cost per unit is calculated after each purchase rather than at the end of the period.
C)an average cost per unit is calculated at the end of the period rather than after each purchase.
D)an average cost per unit is not calculated in the same manner that is used for a perpetual inventory system.

Question

Quizplus · Accepted Answer

In a periodic inventory system, the average cost method calculates the average cost per unit at the end of the period, after all purchases have been made, rather than after each individual purchase. This contrasts with a perpetual system where the average cost can be updated after each purchase.

When the Average Cost Method Is Applied in a Periodic