Vol. 3 Periodic vs. Perpetual Inventory Systems

Question 1

Companies typically record changes to inventory using either a ________ or a ___________.

Answer 1

periodic inventory system; perpetual inventory system

Question 2

When are inventory values and costs of sales determined under a periodic inventory system?

Answer 2

Inventory values and costs of sales are determined at the end of an accounting period

Question 3

[periodic inventory system]
the amount of goods available for sale during the period

Answer 3

the total of purchases and beginning inventory

Question 4

[periodic inventory system]
The cost of sales

Answer 4

the ending inventory amount subtracted from the goods available for sale

Question 5

[periodic inventory system]
the quantity of goods in ending inventory

Answer 5

usually obtained or verified through a physical count of the units in inventory

Question 6

[inventory systems]
The allocation of goods available for sale to cost of sales and ending inventory is the same for these inventory valuation methods

Answer 6

Specific Identification or FIFO

Question 7

[Inventory systems]
Under LIFO, the periodic and perpetual inventory systems will generally result in _____ ________ to cost of sales and ending inventory compared to other valuation methods

Answer 7

significantly different allocations

Question 8

[inventory systems]
Under ______, the periodic and perpetual inventory systems will generally result in significantly different allocations to cost of sales and ending inventory compared to other valuation methods

Answer 8

LIFO

Question 9

[Inflationary Environment]
LIFO will result in higher cost of sales and lower inventory carrying amounts than FIFO …

Answer 9

during inflationary periods (increasing inventory costs) if inventory unit levels are also stable or increasing.