On January 1,2014,a Company Had 100 Units of Inventory

question 57

Multiple Choice

On January 1,2014,a company had 100 units of inventory.A company acquired 100 units of inventory on January 31,2014 and 100 units on December 1,2014.The company sold 100 units on December 31,2014,which was the company's only sale.Under FIFO,the cost of goods sold would come from ________.

• A) the purchase cost of beginning inventory
• B) the purchase cost on January 31, 2014
• C) the purchase cost on December 1, 2014
• D) an average of the cost over the two purchase dates

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Definitions:

Bonds

Fixed income investments representing a loan made by an investor to a borrower, typically corporate or governmental, which pays periodic interest payments and returns the principal at maturity.

Currency Futures

Financial contracts to exchange a specified amount of a currency at a predetermined future date and price, used to hedge against or speculate on currency movements.

Non-amortized Debt

Debt that is not regularly reduced through payments covering principle and interest over time.

Interest Payments

Interest payments are the regular payments made to a lender by a borrower for the use of borrowed money, typically calculated as a percentage of the principal.