1. Periodic Inventory System is more suitable for small enterprises.

1. Closing inventory = Opening inventory + Purchases + Direct expenses + Cost of goods sold.

1. A building is considered inventory in a construction business.

If the profit is 25% of cost then it is 20% of Sales

1. Inventories are stocks of goods and materials that are maintained for mainly the purpose of revenue generation.

1. When closing inventory is overstated, net income for the accounting period will be understated.

Under FIFO, value of closing inventory is calculated considering that inventory most recently purchased has not been sold

Valuing inventory at cost or net releasable value whichever is lower is based on which principle of Conservatism

Under inflationary trend, FIFO method will show highest value of inventory

1. In a perpetual inventory system, inventory records are updated continuously as transactions occur.

11. The value of stock is shown on the assets side of the balance-sheet as fixed assets.

11. Perpetual system requires closure of business for counting of inventory.

1. Management has daily information about the quantity and valuation of closing stock under physical Inventory System.

11. Finished goods are normally valued at cost or net realisable value whichever is higher.