Which of the following line items would appear on the income statement of a company that uses the periodic inventory system, but not on that of a company that uses the perpetual inventory system?

A) Net Sales Revenue

B) Cost of Goods Sold

C) Cost of Goods Available for Sale

D) Operating expenses

Question

Business

Greer

2 November, 07:47

Which of the following line items would appear on the income statement of a company that uses the periodic inventory system, but not on that of a company that uses the perpetual inventory system?

A) Net Sales Revenue

B) Cost of Goods Sold

C) Cost of Goods Available for Sale

D) Operating expenses

+2

Answers (1)

Know the Answer?

Alexandria Perry · Answer 1

C) Cost of Goods Available for Sale

Explanation:

Cos of goods available for sale appears in income statement made under periodic Inventory system but it does not in the income statement made under perpetual inventory system. In per periodic system COGS is calculated by adjusting purchases, allowances for purchases, freight and all other cost to cost of goods available for sale. By deducting closing inventory we calculate the COGS. On other hand in perpetual system purchases are added in the opening and purchase return and closing inventory deducted to reach at COGS.

Which of the following line items would appear on the income statement of a company that uses the periodic inventory system, but not on that of a company that uses the perpetual inventory system?A) Net Sales RevenueB) Cost of Goods SoldC) Cost of Goods Available for SaleD) Operating expenses