A Company Using the Periodic Inventory System Has Merchandise Inventory

question 170

Multiple Choice

A company using the periodic inventory system has merchandise inventory costing $210 on hand at the beginning of the period.During the period,merchandise costing $635 is purchased.At year-end,merchandise inventory costing $160 is on hand.The cost of merchandise sold for the year is

• A)$795
• B)$685
• C)$265
• D)$635

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Definitions:

Performance Incentive

A reward system designed to encourage workers to achieve specific performance targets.

Perverse Incentive

A perverse incentive is an incentive that has an unintended and undesirable result that is contrary to the interests of the incentive makers.

Budget-gaming Problem

A situation in budgeting where individuals or departments manipulate figures or withhold information to secure budgetary advantages.

Compensation Schedule

A structured plan that outlines the timing and amounts of payments for work performed, damages, or other compensations.