The following characteristics may be related to either periodic inventory or perpetual inventory systems or both.
a. Purchases of inventory are journalized to an asset account at the time of purchase.
b. Purchases of inventory are journalized to an expense account at the time of purchase.
c. Inventory records are constantly updated.
d. Sales made require a second entry to be journalized to record cost of goods sold.
e. Bar code scanners that record sales transactions are most often associated with this inventory system.
f. A physical count of goods on hand at year end is required.
Requirement
1. Identify each characteristic as one of the following:
a. Periodic inventory
b. Perpetual inventory
c. Both periodic and perpetual inventory
d. Neither periodic nor perpetual inventory