When Using the Average Method Under the Periodic Inventory System

question 17

Multiple Choice

When using the average method under the periodic inventory system the average cost is calculated:

• A)after each new purchase.
• B)at the end of the period.
• C)after each new sale and sales return.
• D)after each new purchase and purchase return.

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Definitions:

Total Revenue

The total amount of money earned by a business from the sale of its goods and services.

Price-elastic

Refers to the responsiveness of demand or supply to changes in price, with high elasticity indicating significant response to price changes.

Quantity Demanded

The sum of a product or service that buyers are prepared and able to buy at a specific price.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, often used to gauge the sensitivity of demand.