1. Explain the operation of a periodic inventory system.

2. The periodic inventory system is likely to be used by a business that sales variety of merchandise with low unit prices, such as a drugstore or hardware store.

3. When the periodic inventory is being used, a physical inventory must be taken to determine the amount of the ending inventory.

4. The periodic inventory system is likely applied to a business that sells a variety of merchandise with low unit price, such as a drugstore, groceries or hardware store.

5. The accounting recording procedures are different under the periodic inventory system and the perpetual inventory system.

6. In the periodic inventory system, the business does not keep a continuous record of the inventory on hand.

7. The three other inventory accounting methods are commonly used when a periodic inventory accounting is employed.

8. Physical inventory at fixed periods must be taken under either perpetual inventory system or periodic inventory system.

9. The two alternative approaches to the determination of inventory and of cost of goods sold are called the perpetual inventory system and the periodic inventory system .

10. In small businesses , the owner can visually inspect the goods on hand for control purposes. The end-of-chapter supplement covers the periodic inventory system.

11. The following entries demonstrate the recording procedures to be followed under the perpetual inventory system , as contrasted with the periodic inventory system .

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12. Businesses such as office supply outlets, restaurants, and small de-partment stores also use the periodic inventory system.

13. During the period of inflation, is a balance of stock system or a periodic inventory system regardless, account the price tool and will produce the different result differently.