-Refer to the Above Figure

question 182

Multiple Choice

-Refer to the above figure. An external cost exists. The amount of that cost is represented by

• A)P₂.
• B)Q₁.
• C)the vertical distance between point A and the supply curve S₁.
• D)the distance between C and A.

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Definitions:

Physical Inventory

The process of counting and verifying the actual quantities of physical merchandise or assets present in a store or warehouse.

Inventory Costing Methods

Inventory costing methods are accounting principles used to value inventory, including first-in, first-out (FIFO); last-in, first-out (LIFO); and weighted average cost.

Net Income

A company's remaining earnings after deducting all expenses and taxes from its revenue.

FIFO Method

An inventory valuation method that assumes the first items placed in inventory are the first sold.