PRC-1 · Chapter 10 · Question 98 of 100
Under a periodic inventory system, the 'Closing Inventory' figure used in the financial statements is determined by:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A physical count and valuation at the end of the reporting period.
Explanation
In a periodic system, the inventory account is not continuously updated. Closing inventory must be determined via a physical stock count at the end of the period and then adjusted into the accounts.
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