ABC Has No Opening Inventory

question 29

Multiple Choice

ABC has no opening inventory. During the year, it buys 2000 microwave ovens at $300 each and sells 1500 of them for $500 each. Cash operating expenses are $40 000 and it owes wages of $10 000 at year-end. What is accrual profit for the year?

• A) $100 000
• B) $110 000
• C) $250 000
• D) None of the above

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Definitions:

Open System

A concept in systems theory where an organization is seen as being open to, and interacting with, its environment in a dynamic exchange of information, energy, and resources.

Resource Inputs

The resources (such as time, money, materials, and labor) that are utilized in the production process or in the provision of services.

Outputs

The results or products that emerge from a system, process, or activity, measuring its effectiveness or productivity.

Tight Bureaucracy

A highly structured and rule-oriented form of organization where the adherence to formal procedures and hierarchies is emphasized.