Question

In a perpetual average cost system:_________
a) A new weighted-average unit cost is calculated each time additional units are purchased.
b) The cost allocated to ending inventory is generally the same as it would be in a periodic inventory system.
c) The moving-average unit cost is determined following each sale.
d) The average is determined by dividing the total number of units sold by the cost of units purchased during the period.

Answer 1

Answer:

a) A new weighted-average unit cost is calculated each time additional units are purchased

Explanation:

Perpetual Inventory system is the method of recalculating the value of goods held after each transaction.

In Weighted Average Cost Method, the average cost of goods held is recalculated each time a new delivery of goods is received. Issues are then priced at this weighted average cost.