How Many of These Are Advantages of the Weighted Average

question 31

Multiple Choice

How many of these are advantages of the weighted average method of applying costs to inventory?
It is not subject to profit manipulation.
The profit and closing inventory values tend to be 'smoothed' compared to other methods.
It is simple to understand.

• A) 0
• B) 1
• C) 2
• D) 3

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Definitions:

Preferred Stock

A class of ownership in a corporation with a fixed dividend, receiving priority over common stock in dividend distribution and asset liquidation.

Preferred Stock

A class of stock that provides shareholders with a fixed dividend before any dividends are issued to common stockholders, often with no voting rights.

Common Stock

A type of equity ownership in a corporation, representing a claim on part of the company's profits and assets.

Dividends in Arrears

Outstanding dividend payments that have not been paid to preferred shareholders.