In Calculating Gross Profits, a Firm Utilizing FIFO Inventory Accounting

question 61

Multiple Choice

In calculating gross profits, a firm utilizing FIFO inventory accounting would assume that

• A) all sales were from the current production.
• B) all sales were from the beginning inventory.
• C) sales were from the beginning inventory until it was depleted, and then sales were from the current production.
• D) all sales were for cash.

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Definitions:

Persuasive Evidence

Information or documentation that reliably confirms the occurrence of a transaction or the reality of an asset or liability, meeting certain criteria to be recognized in financial statements.

Internet Companies

Entities primarily engaged in providing services or products via the internet, including e-commerce, social networking, and cloud computing.

Gross Basis

Gross basis refers to the total, comprehensive calculation of income or expenses without deducting any taxes or expenses.

Net Basis

Payment terms for goods or services that require payment in full, without any deductions or discounts, within a specified period.