Rational Choice

question 24

Multiple Choice

Rational choice

• A) is a choice that uses the available resources to best achieve the objective of the person making the choice.
• B) is always efficient.
• C) is what you must give up to get what you want.
• D) is made by comparing different incentives.
• E) provides the answer to only the "how" question.

---

Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated by adding new purchases to beginning inventory and subtracting the cost of goods sold.

Periodic Inventory System

A periodic inventory system is a method of inventory valuation in which inventory is physically counted at the end of a specific period to determine the cost of goods sold and ending inventory.

Average Cost Method

An inventory costing method wherein the cost of goods sold and remaining inventory is valued at the average cost of all inventory items purchased during a period.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated either by a physical count or accounting estimation methods.