The inventory system that uses the merchandise inventory account as an active account is called the:
A)periodic system.
B)perpetual system.
C)LIFO system.
D)FIFO system.

Question

Quizplus · Accepted Answer

The perpetual system is an inventory system that continuously keeps track of inventory levels and uses the merchandise inventory account as an active account. This system provides real-time inventory information and is commonly used by businesses with high-volume sales. The periodic system, on the other hand, only updates inventory records periodically, such as at the end of each accounting period. LIFO and FIFO are methods of inventory valuation, not inventory systems.

The Inventory System That Uses the Merchandise Inventory Account as an Active