Quayle Corporation's Inventory Cost on Its Balance Sheet Was Lower

question 71

Multiple Choice

Quayle Corporation's inventory cost on its balance sheet was lower using first-in, first-out than it would have been using last-in, first-out.Assuming no beginning inventory, in what direction did the cost of purchases move during the period?

• A)Up
• B)Down
• C)Steady
• D)Cannot be determined

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Definitions:

Shift of Assets

Shift of assets involves reallocating or transferring assets from one investment to another or from one asset class to another.

Accounts Receivable

Money owed to a business by its customers for goods or services sold on credit.

Fees Earned

Income or revenue generated by providing services, distinct from selling goods.

Supplies

Items used in the operation of a business but not directly related to the production of goods or services, such as office supplies.