An Internal Auditor Found the Following Information While Reviewing the Monthly

question 75

Multiple Choice

An internal auditor found the following information while reviewing the monthly financial statements for a wholesaler of safety glasses: Opening inventory:       1,000 units at $2 per unit Purchased:                 5,000 units at $3 per unit Sold:                          3,000 units at $7 per unit The cost of goods sold was reported at $8,500. Which of the following inventory methods was used to derive this value?

• A) Average cost method.
• B) First-in, first-out (FIFO) method.
• C) Specific identification method.
• D) Activity-based costing method.

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