A Company Had the Following Purchases and Sales During Its

question 47

Multiple Choice

A company had the following purchases and sales during its first year of operations: $$\begin{array} { | l | l | l | } \hline & \text { Purchases } & \text { Sal es } \\\hline \text { January. } & 10 \text { units at } \$ 120 & 6 \text { units } \\\hline \text { February. } & 20 \text { units at } \$ 125 & 5 \text { units } \\\hline \text { May. } & 15 \text { units at \$130 } & 9 \text { units } \\\hline \text { September: } & 12 \text { units at \$135 } & 8 \text { units } \\\hline \text { November: } & 10 \text { units at } \$ 140 & 13 \text { units } \\\hline\end{array}$$
On December 31, there were 26 units remaining in ending inventory.
- Using the Perpetual LIFO inventory valuation method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)

• A) $5,470.
• B) $8,670.
• C) $5,305.
• D) $5,130.
• E) $5,400.

Understand the principles guiding the recording of assets and their valuation.

Recognize the importance of ethical values in accounting.

Distinguish between the different financing and investing activities of a business.

Explain the significance of assumptions in accounting such as the going concern assumption, the monetary unit assumption, and the economic entity assumption.

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Definitions:

Jurisdiction

The official power to make legal decisions and judgments, often defined by geographic area or the type of case.

Convenience Stores

Retail businesses that sell a limited range of everyday items such as groceries, snack foods, and sundries, and are often open for extended hours.

Self-Incrimination

The act of exposing oneself to prosecution by being forced to respond to questions or by providing evidence.

Criminal Activity

Conduct that violates the law and is punishable by the state through fines, imprisonment, or other penalties.