Answer the following statements true (T) or false (F)
1) When a company uses the perpetual inventory system, there is no need to conduct a physical count of inventory.
2) The Merchandise Inventory account should stay current at all times in a perpetual inventory system.
3) In a perpetual inventory system, the entry that adjusts the Merchandise Inventory account based on the physical count equals the merchandise inventory balance before adjustment less actual merchandise inventory on hand.
4) The entry to record inventory shrinkage includes a debit to the Merchandise Inventory account. Assume a perpetual inventory system is used.
5) If a physical count of inventory indicates that the Merchandise Inventory account is overstated, an adjusting entry is required to record the difference. Assume a perpetual inventory system is used.
1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. TRUE
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Answer the following statement true (T) or false (F)
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Indicate whether the statement is true or false