Question 1 : Consider one business located at your area is using perpetual inventory system and the other business is using periodic inventory system located the same area. You interview from the individual of each business who has the knowledge of inventory system and financial statements.

Required:

Ask the following questions separately for each business organization record your answers accordingly.

a) Explains the detail procedure used in accounting for sales transactions, determining cost of goods sold, and how to keep track of inventory levels.

b) Describe the reasons offered by the person interviewed as to why the business uses this type of system.

c) Do you agree that your business organization is using appropriate inventory system under the circumstances if not then give recommendations and explain your reasoning?