Refer to Chapter 5 pages: 244 – 245 and Illustration 5-3 on page 229
Illustration 5-4 demonstrates the difference between a Perpetual Inventory system and that of a Periodic inventory system.
Write a 200 word paragraph answering the following questions:
- Describe the flow of cost.
- How would you calculate cost of goods sold?
- What items make up cost of goods sold?
- What is the difference between a perpetual inventory system and periodic inventory system as it relates to computing cost of goods sold?
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