Match Each Description to the Appropriate Cost Flow Assumption (A-D)

question 204

Multiple Choice

Match each description to the appropriate cost flow assumption (a-d) .
-The cost of the units sold and in ending inventory is a weighted average of the purchase costs.

• A)Weighted average
• B)First-in, first-out (FIFO)
• C)Last-in, first-out (LIFO)
• D)Specific identification

---

Definitions:

Loss On Redemption

The financial loss incurred when a debt instrument, such as a bond, is repaid before its maturity date.

Effective-Interest Method

A method of calculating the amortized cost of a bond and the amount of interest expense over its relevant period.

Amortization

The process of spreading out the cost of an intangible asset over its useful life or the repayment of loan principal over time.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, reflected in its income statement.