A Simple Account Form Widely Used in Accounting to Illustrate

question 222

Multiple Choice

A simple account form widely used in accounting to illustrate how debits and credits work is called a:

• A)Dividend account
• B)Common stock account
• C)Drawing account
• D)T-account
• E)Balance column sheet

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Definitions:

Average Cost

A method of inventory valuation where the cost of goods sold and ending inventory is determined by taking the weighted average of the cost of all items available for sale during the period.

FIFO

First-In, First-Out, an inventory valuation method where goods purchased first are sold first, affecting the cost of goods sold and ending inventory value.

Average Cost Method

An inventory valuation method that calculates the cost of goods sold based on the average cost of all items in stock.

Physical Flow

The actual movement or transfer of goods and materials through a production process or supply chain, distinct from the associated flow of costs or information.