When Using a Periodic Inventory System, Which Statement Concerning the Computation

question 65

Multiple Choice

When using a periodic inventory system, which statement concerning the computation of cost of goods sold is correct?

• A)The amount of ending inventory is determined on the last day of the accounting period.
• B)Cost of goods available for sale includes net purchases plus the ending inventory.
• C)Purchases represent cash paid for purchases during the accounting period.
• D)Freight-in is ignored.

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Definitions:

EIC

Earned Income Credit; a refundable tax credit in the U.S. for low to moderate-income working individuals and families, particularly those with children.

Qualifying Children

are dependents who meet certain conditions regarding relationship, age, residency, and support, affecting tax benefits.

AGI

Adjusted Gross Income, which is gross income minus specific deductions, used to calculate an individual's tax liability.

EIC

The Earned Income Credit, a refundable tax credit for low- to moderate-income working individuals and families, particularly those with children.