Ending Inventory for Commodity X Consists of 20 Units

question 92

Multiple Choice

Ending inventory for Commodity X consists of 20 units. Under the FIFO method, the cost of the 20 units is $5 each. Current net realizable value is $4.75 per unit. Using the lower-of-cost-and-net -realizable-value rule to value inventory, the balance sheet would show ending inventory of:

• A)$5.00.
• B)$4.75.
• C)$95.00.
• D)$100.00.

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Definitions:

Cash Account

A financial account that tracks the flow of cash transactions, including both receipts and disbursements.

Cash Receipts

The collection of money (cash, checks, wire transfers) by a business from its customers.

Cash Payments

Payments of cash to fulfill debts or acquire goods and services.

T Accounts

A visual representation of a ledger account that separates debits and credits, making the accounting process simpler.