Question

Under a periodic inventory system

A. a physical inventory is taken at the end of the period
B. a separate account for each type of merchandise is maintained in a subsidiary ledger
C. accounting records continuously disclose the amount of inventory
D. Merchandise Inventory is debited when goods are returned to vendors

Answer 1

Answer:

The correct answer is letter "A": a physical inventory is taken at the end of the period.

Explanation:

When the general ledger is only updated by the end of a period it is said that the firm is using a periodic inventory system. This approach is implemented because physical inventories could be time-consuming. It is even more helpful for small businesses since their inventory is limited.