Thompson Company Updates Its Inventory Records Perpetually

question 110

Multiple Choice

Thompson Company updates its inventory records perpetually.The company's records showed a beginning inventory of $600,cost of goods sold of $1,400,and ending inventory of $800.How much inventory was purchased during the year?

• A) $1,200
• B) $1,000
• C) $900
• D) $1,600

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Definitions:

Domestic Corporations

Companies that are incorporated and operate within the legal boundaries of a specific country.

Accrual-based Income

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash transactions occur.

Domestic Corporations

Corporations that are registered and operate within the country of incorporation, adhering to its laws and taxation.

Excess Fair Value

The amount by which the fair value of an asset exceeds its carrying value on the balance sheet, often recognized in business combinations or asset revaluations.