Question

Which type or types of inventory timing system (periodic or perpetual) requires the user to record two journal entries every time a sale is made. A. periodic B. perpetual C. both periodic and perpetual D. neither periodic nor perpetual

Name: Problem 8, Chapter 10: Principles of Accounting Volume 1: Financial Accounting
Uploaded: 2020-05-04T11:35:32-08:00
Duration: 3 min 14 s
Channel: Puneet Prajapati
Description: Which type or types of inventory timing system (periodic or perpetual) requires the user to record two journal entries every time a sale is made. A. periodic B. perpetual C. both periodic and perpetual D. neither periodic nor perpetual

   Which type or types of inventory timing system (periodic or perpetual) requires the user to record two journal entries every time a sale is made.
A. periodic
B. perpetual
C. both periodic and perpetual
D. neither periodic nor perpetual

Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin,… 1st Edition

Chapter 10, Problem 8

Instant Answer

Solved by Expert Puneet Prajapati

05/04/2020

Step 1

The periodic system updates inventory records at the end of a specific period, such as a month or a year. It does not require recording of journal entries every time a sale is made. The perpetual system, on the other hand, updates inventory records continuously Show more…

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Which type or types of inventory timing system (periodic or perpetual) requires the user to record two journal entries every time a sale is made. A. periodic B. perpetual C. both periodic and perpetual D. neither periodic nor perpetual

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Key Concepts

Periodic Inventory System

A periodic inventory system updates inventory records at the end of an accounting period instead of after each transaction. Under this system, sales are recorded with a single journal entry for the revenue, and the cost of goods sold is determined by a physical inventory count at period-end, meaning it does not require two journal entries per sale.

Perpetual Inventory System

A perpetual inventory system continually updates inventory records after every transaction. When a sale is made, it requires two journal entries: one to record the revenue and another to record the cost of goods sold. This system provides real-time inventory information and facilitates timely decision making.

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