Question

Q 5.36: Badger Enterprises purchased aluminum from JG Metals. When Badger Enterprises recorded this transaction, they made entries into three accounts: Purchases, Freight Costs, and Purchase Discounts. Based on this, what type of inventory system does Badger Enterprises use

Answer 1

Answer: periodic inventory system

Explanation:

The type of inventory system used by Badger Enterprises is the periodic inventory system. The periodic inventory system is an inventory whereby updates are usually done on periodic basis.

In the periodic inventory system, physical count of inventory is done at specific intervals. This is the method used by the company in the question.