ABC Has No Opening Inventory

question 56

Multiple Choice

ABC has no opening inventory.During the year,it buys 2000 microwave ovens at $300 each and sells 1500 of them for $500 each.Cash operating expenses are $40 000 and it owes wages of $10 000 at year-end.What is accrual profit for the year?

• A) $250 000.
• B) $260 000.
• C) $100 000.
• D) $110 000.

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Definitions:

Accounting Information

Financial data and reports generated from the accounting system of a business, used for decision-making and financial analysis.

Limited Liability Company (LLC)

A business form consisting of one or more persons or entities filing an operating agreement with a state to conduct business with limited liability to the owners, yet treated as a partnership for tax purposes.

Missing Amount

A term used in accounting and finance to denote a value that must be found within a set of numbers or financial statements when it is not explicitly provided.

Service Business

A type of business that provides intangible products, such as expertise, time, or effort, to consumers in exchange for payment.