The Inventory Costing System That Charges Inventory to Cost of Goods

question 5

Multiple Choice

The inventory costing system that charges inventory to cost of goods sold in chronological order of its purchase is referred to as:

• A)FIFO
• B)LIFO
• C)specific identification
• D)periodic identification

---

Definitions:

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Marginal Product

The additional output that results from using one more unit of a particular input while keeping other inputs constant.

Output

The quantity of products or services generated by a business, sector, or economic system over a certain timeframe.

Wage

Compensation or payment to an employee for labor or services rendered, typically expressed on an hourly, daily, or piecework basis.