In the First Month of Operations for Pendleton Industries the Total

question 111

Multiple Choice

In the first month of operations for Pendleton Industries the total of the debit entries to the cash account amounted to $33000 ($13000 investment by the owner and revenues of $20000) . The total of the credit entries to the cash account amounted to $21000 (purchase of equipment $8000 and payment of expenses $13000) . At the end of the month the cash account has a(n)

• A) $5000 credit balance.
• B) $5000 debit balance.
• C) $12000 debit balance.
• D) $12000 credit balance.

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Definitions:

FIFO Method

A technique for inventory valuation and cost determination where goods first introduced into inventory are the first to be sold.

Process Costing System

An accounting method used for homogeneous products, where costs are assigned to processes or departments and averaged over the units produced.

Weighted Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all goods available for sale.

Finished Goods

Items that have been fully produced but are still awaiting sale or distribution to buyers.