When the FIFO Method Is Used, Ending Inventory Is Assumed

question 120

Multiple Choice

When the FIFO method is used, ending inventory is assumed to consist of the:

• A)units with the lowest per unit cost.
• B)units with the highest per unit cost.
• C)oldest units.
• D)most recently purchased units.

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Definitions:

Journal Entry

A record in accounting that notes transactions and changes in financial statements.

Net Pay

The amount of money an employee takes home after all deductions, such as taxes and benefits, are taken out of their gross salary.

FICA Tax

Federal Insurance Contributions Act tax; a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare.

Federal Income Taxes

Federal income taxes are taxes levied by the national government on taxable income of individuals, corporations, trusts, and other legal entities.