What Is the Ending Inventory Balance at the End of the Year

question 171

Multiple Choice

What is the ending inventory balance at the end of the year using the FIFO method?

• A) $1,685
• B) $1,575
• C) $1,805
• D) $3,585

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Definitions:

Depreciation

The process by which a business spreads out the cost of a capital asset over its expected useful life.

Double-Declining-Balance

A method of accelerated depreciation which doubles the straight-line depreciation rate, resulting in a faster depreciation of assets in the early years of their life.

Depreciation Expense

The organized allocation of a tangible asset's expenditure over its life of usefulness.

Straight-Line Method

A method of depreciation that allocates an equal amount of the asset's cost to each accounting period over its useful life.