A New Average Cost Is Calculated After Each Purchase When

question 57

Multiple Choice

A new average cost is calculated after each purchase when a business is using which of the following methods?

• A)Last- In, First- Out
• B)Specific- unit- cost
• C)Average- cost
• D)First- In, First- Out

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Definitions:

CRA

CRA can refer to a Credit Rating Agency, which is an organization that assigns credit ratings to issuers of certain types of debt securities, as well as the debt instruments themselves.

Economic Life

The expected period of time during which an asset is useful to the average owner, or until an asset is projected to generate economic benefits.

Tax Purposes

The reason or need to undertake specific actions or record transactions in a certain way to comply with tax laws.

Operating Lease

A contract that allows for the use of an asset but does not transfer ownership rights of the asset.