A Company Just Starting in Business Purchased Three Merchandise Inventory

question 166

Multiple Choice

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $240 and used FIFO costing, the gross profit for the period would be

• A) $65.
• B) $75.
• C) $60.
• D) $50.

Define and categorize different types of expenses in accounting.

Understand the concept and calculation of gross profit.

Comprehend the significance of liquidity in financial analysis.

Recognize the importance and procedure for tracking merchandise returns and allowances.

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Definitions:

Extrinsic Motivation

The drive to perform or engage in an activity due to external rewards or pressures rather than for the satisfaction derived from the activity itself.

Obesity

A medical condition characterized by an excessive accumulation of body fat, often defined by a Body Mass Index (BMI) of 30 or higher.

Faulty Metabolism

An abnormality or impairment in the body's ability to convert food and drink into energy, leading to various health issues.

Genetics

The study of heredity and the variation of inherited characteristics.