A Company Just Starting Business Made the Following Four Inventory

question 157

Multiple Choice

A company just starting business made the following four inventory purchases in June: A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand.The inventory method which results in the highest gross profit for June is

• A)the FIFO method.
• B)the LIFO method.
• C)the weighted-average unit cost method.
• D)not determinable.

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Definitions:

Interest Revenue

Income earned from lending money or depositing funds into interest-bearing accounts.

Unrealized Gain

A profit that exists on paper resulting from an investment that has not yet been sold for cash.

Trading Investments

Trading Investments refer to securities bought and held primarily for selling them in the short term to profit from price fluctuations.

Other Revenue

Revenue from sources other than the primary operating activity of a business.