Match the Appropriate Letter Regarding Inventory Systems with Each of the Following

Short Answer

Match the appropriate letter regarding inventory systems with each of the following statements.

A. The perpetual inventory system.
B. The periodic inventory system.
C. Both the perpetual and periodic inventory systems.
D. Neither the perpetual nor the periodic inventory systems.
1. Uses a separate account for recording purchases.
2. Requires that purchases be recorded at their cash equivalent cost.
3. Requires that two concurrent journal entries be made to record a purchase.
4. Cost of goods sold cannot be determined until a physical count is taken.
5. Inventory account is increased for each purchase and decreased for each sale.
6. Used to reveal any inventory shortages and shrinkage that occur during the period.