Chapter 7, Problem 10MCQ

Which of the following is false regarding a perpetual inventory system?

1. a. Physical counts are not needed since records are maintained on a transaction-by|-transaction basis.
2. b. The balance in the inventory account is updated with each inventory purchase and sale transaction.
3. c. Cost of goods sold is increased as sales are recorded.
4. d. The account Purchases is not used as inventory is acquired.