A Company Uses Periodic Inventory in Connection with the Average-Cost

question 153

Multiple Choice

A company uses periodic inventory in connection with the average-cost method. The company began the year with zero inventory balance. They had the following transactions during the year: At the end of the year, they counted the inventory and found 55 units remaining. How much was the Cost of goods sold for the year? (Please round to the nearest whole dollar.)

• A)$541
• B)$582
• C)$626
• D)$592

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Definitions:

Capital Deficiency

A situation where a company's total capital is less than its total liabilities, indicating financial distress.

Voluntary Act

An action undertaken by an individual or entity out of free will without coercive influences.

Liquidation

The process of converting assets into cash or cash equivalents by selling them, often associated with dissolving a company or paying off debts.

Capital Account

A financial statement that shows the changes in a company's equity throughout a specific period due to various business activities.