When the Average-Cost Method Is Applied to a Perpetual Inventory

question 136

True/False

When the average-cost method is applied to a perpetual inventory system, the sale of goods will change the unit cost of the goods that remain in inventory.

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Definitions:

Principal

The primary party to a transaction or contract who has authorized another (agent) to act on their behalf or the main amount of debt before interest.

Constructive Notice

A legal fiction that signifies a person or entity should have known, as a reasonable person would have, even if they have no actual knowledge of it.

Apparent Authority

A principle that allows a third party to assume an agent has the authorization to act on behalf of a principal, even if such authority has not been granted.

Constructive Notice

A legal concept assuming that a person or entity is aware of facts by virtue of the information being publicly available, regardless of whether they have actually reviewed the information.