Which of the following does NOT correctly describe a periodic inventory system?
A) Cost of goods sold is calculated every time a sale is made.
B) Cost of goods sold is a residual amount.
C) Assuming a FIFO cost flow, cost of goods sold would equal that calculated by the perpetual system.
D) Inventory and cost of goods sold must be updated at the end of the period.

Question

Quizplus · Accepted Answer

In a periodic inventory system, cost of goods sold is not calculated every time a sale is made, but rather at the end of the accounting period based on a physical count of inventory and the cost of goods available for sale.

Which of the Following Does NOT Correctly Describe a Periodic