What Would Be the Account Balance in the Service Revenue

question 206

Multiple Choice

What would be the account balance in the Service Revenue account after the following transactions,assuming a zero beginning balance?

• A)$17,400 credit
• B)$14,400 credit
• C)$14,400 debit
• D)$15,900 credit
• E)$15,900 debit

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Definitions:

Average Cost

A calculation of the total cost of goods available for sale divided by the total units available for sale, used to compute cost of goods sold in certain inventory valuation methods.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold in a company.

Periodic Inventory System

An inventory system in which the inventory count and cost of goods sold calculation are performed at specific intervals, typically at the end of an accounting period.

FIFO

FIFO, which stands for "first in, first out," is an inventory valuation method where the first items placed in inventory are the first ones sold. This approach aims to mirror the actual flow of goods.