Vita Gives Walt a $500 Check as Payment for a Debt

question 13

Multiple Choice

Vita gives Walt a $500 check as payment for a debt. Walt crudely increases the amount of the check to $5,000 and deposits the check in his bank account. Vita is liable for the payment of $5,000 to

• A)no one.
• B)Walt and his bank.
• C)Walt's Bank only.
• D)Walt only.

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Definitions:

FIFO

First-In, First-Out, an inventory valuation method where the first items purchased are the first ones to be sold, impacting the cost of goods sold and inventory on the balance sheet.

LIFO

"Last In, First Out," an inventory valuation method where the most recently produced or purchased items are recorded as sold first, affecting cost of goods sold and inventory value.

FIFO Inventory Method

An accounting method for valuing inventory that assumes the first items purchased are the first to be sold.

Cost Of Goods Sold

The total cost directly associated with producing goods that have been sold, including materials and labor.