Which of the Following Is the Correct Formula to Calculate

question 151

Multiple Choice

Which of the following is the correct formula to calculate weighted-average unit cost for merchandise inventory?

• A) Weighted-average unit cost = Cost of goods available for sale + Number of units available
• B) Weighted-average unit cost = Cost of goods available for sale × Number of units available
• C) Weighted-average unit cost = Cost of goods available for sale - Number of units available
• D) Weighted-average unit cost = Cost of goods available for sale / Number of units available

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Definitions:

Indirect Method

A method for preparing the cash flow statement where net income is adjusted for non-cash transactions and changes in working capital to calculate net cash from operating activities.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of an entity, typically involving the inflow of cash from investors or banks.

Indirect Method

A technique used in the statement of cash flows to adjust net income for the effects of non-cash transactions and changes in working capital to determine cash flow from operating activities.

Operating Activities

Activities directly related to the day-to-day operations of a business, such as sales, purchasing, payroll, and other routine business transactions.