For the Perpetual Inventory System,which of the Following Effects Does

question 88

Multiple Choice

For the perpetual inventory system,which of the following effects does NOT occur upon the return from a customer of merchandise sold on account?

• A)Increases Sales Returns and Allowances and decreases Accounts Receivable
• B)Decreases Cost of Merchandise Sold and increases Merchandise Inventory
• C)Increases Purchase Returns and Allowances and decreases Merchandise Inventory
• D)All of these occur.

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Definitions:

Average Fixed Cost

The fixed expenses of a company divided by the number of units produced, showing cost per unit.

Average Variable Cost

Average variable cost is the total variable costs of production divided by the quantity of output produced; it changes with production volume.

Marginal Cost

The expenditure required to produce one more unit of a product or service.

Incremental Cost

The additional cost associated with producing one more unit of a product or service.