The Inventory Data for an Item for November Are Using a Perpetual System, What Is the Cost of the

question 124

Multiple Choice

The inventory data for an item for November are: $$\begin{array} { r l l } \text { Nov. } 1 & \text { Inventory } & 20 \text { units at } \$ 19 \\4 & \text { Sold } & 10 \text { units } \\10 & \text { Purchased } & 30 \text { units at } \$ 20 \\17 & \text { Sold } & 20 \text { units } \\30 & \text { Purchased } & 10 \text { units at } \$ 21\end{array}$$ Using a perpetual system, what is the cost of the goods sold for November if the company uses LIFO?

• A) $610
• B) $600
• C) $590
• D) $580

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Definitions:

Sales On Account

Sales made on credit, where the buyer is allowed to pay at a later date.

Cost Of Goods Sold

The direct expenses incurred in the production process of goods a company retails, consisting of materials and labor.

Acid-Test Ratio

A financial metric that measures the ability of a company to pay its short-term obligations with its most liquid assets.

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a specific moment in time, showing assets, liabilities, and owners' equity.