Multiple choice

Which of the following methods of the inventory record system ensures greater accuracy?

  1. Standard valuation system

  2. Market value system

  3. Periodic inventory system

  4. Perpetual inventory system

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Perpetual system is the method where record is updated after each receipt and issue; it ensures greater accuracy. Standard valuation is the method of recording material issue at pre-determined standard price while in market value system; they are recorded at market price. In periodic inventory system, periodic record of inventory is maintained.

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