Adam IncUses a Perpetual Inventory System

question 36

Multiple Choice

Adam Inc.uses a perpetual inventory system. If Adam uses the FIFO method, how much is ending inventory on January 31?

• A)$ 8
• B)$ 12
• C)$ 16
• D)$ 40

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Definitions:

Expected Monetary Value

A statistical concept used to calculate the average outcome when the future includes scenarios that may or may not happen.

Uncertainty

Uncertainty refers to the lack of certainty, predictability, or definiteness about an outcome or condition, often requiring risk assessment and management strategies.

Risk

The potential for loss or the negative consequences that may arise from a given action, decision, or event.

EMV

Expected Monetary Value; a quantitative risk analysis tool used to help in decision-making by calculating the anticipated monetary outcome of different scenarios.