Why are inventories stated at lower-of-cost and net realizable value? O To report a loss when there is a decrease in the future utility. O To keep track of the market value of the inventory. O To avoid understating the cost of the inventory. O To permit future profits to be recognized. Question 2 Which of the following is a characteristic of a perpetual inventory system? Inventory purchases are debited to a Purchases account. Cost of goods sold is recorded with each sale. Inventory records are not kept for every item O Cost of goods sold is determined as the amount of purchases less the change in inventory. to travel betw