A Method of Allocating Merchandise Costs That Assumes the Sales

question 45

True/False

A method of allocating merchandise costs that assumes the sales in the period were made from the most recently purchased merchandise and the earliest merchandise bought remain in inventory is called the last-in, first-out method.

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Definitions:

Receivable

Amounts of money owed to a company by its customers or other parties for goods or services provided.

Periodic Inventory System

An inventory system that updates inventory records at specific intervals, requiring physical counts to determine cost of goods sold.

Purchases

Acquisition of goods or services in exchange for money, usually considered in the context of inventory or supplies for a business.

General Journal

An accounting ledger that records all types of transactions before they are transferred to specific accounts in the general ledger.