A periodic inventory system eliminates the need for:
A) Taking an annual physical inventory.
B) Recording the revenue from sales transactions.
C) Recording the cost of merchandise sold as sales occur.
D) None of the above.

Question

Quizplus · Accepted Answer

In a periodic inventory system, the cost of merchandise sold is not recorded as sales occur. Instead, the cost of merchandise sold is determined at the end of the accounting period through a physical inventory count and calculation of the cost of goods sold. Therefore, choice C is the correct answer as it correctly identifies the elimination of a specific accounting task in a periodic inventory system. Choices A and B are not accurate because even in a periodic inventory system, taking an annual physical inventory may still be necessary, and revenue from sales transactions still needs to be recorded.

A Periodic Inventory System Eliminates the Need For