Under Which of the Following Inventory Costing Methods Is the Cost

question 46

Multiple Choice

Under which of the following inventory costing methods is the cost of sales based on the cost of the oldest purchases?

• A)Average cost
• B)Specific unit cost
• C)First-in,first-out
• D)Last-in,first-out

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Definitions:

Factoring Commissions

Factoring commissions are fees paid to a factor, or financial intermediary, for advancing funds to a business by purchasing its accounts receivable.

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered or used but not yet paid for.

Loss

The result when a company's expenses exceed its revenues during a specific period of time.

Expense

An outflow of money or other resources, incurred to generate revenue, which is recognized in the income statement.