Using the Perpetual System, What Are the Three Types of Inventory

question 101

Essay

Using the perpetual system, what are the three types of inventory cost flow assumptions?

---

Definitions:

Monthly Depreciation Expense

The portion of the total depreciation of an asset that is allocated for a particular month.

Salvage Value

The forecasted final value of an asset once it has exhausted its functional duration.

Note Payable

A written promise to pay a specified amount of money, usually with interest, at a future date; a form of debt.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual rate.