Table 8.1 -Refer to Table 8.1.Suppose Mr.B Withdrew $50,000 from His Account

question 20

Multiple Choice

Table 8.1
-Refer to Table 8.1.Suppose Mr.B withdrew $50,000 from his account that earned 10% to invest into this business.He quit his full-time job that paid $40,000 to manage this business.Mr.B's economic profit equals

• A) $100,000.
• B) $45,000.
• C) $0.
• D) -$45,000.

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Definitions:

Periodic System

An inventory accounting system where goods are physically counted at the end of a specific period to determine the cost of goods sold and ending inventory.

Purchases Returns and Allowances

Refers to a reduction in the cost of purchases due to items being returned or allowances provided by the seller for damaged or unsatisfactory goods.

Merchandise Inventory

Goods that a company holds for the purpose of sale to customers in the ordinary course of business.

Merchandise Inventory

Goods or products that a company holds for the main purpose of selling them to customers.