Addison, Inc -If Addison Uses FIFO, the Cost of the Ending Merchandise

question 119

Multiple Choice

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September:
$\begin{array} { r l l } \text { Sept. } 1 & \text { Inventory } & 20 \text { units at } \$ 20 \\ 4 & \text { Sale } & 10 \text { units } \\ 10 & \text { Purchase } & 30 \text { units at } \$ 25 \\ 17 & \text { Sale } & 20 \text { units } \\ 30 & \text { Purchase } & 10 \text { units at } \$ 30 \end{array}$
-If Addison uses FIFO, the cost of the ending merchandise inventory on September 30 is

• A) $800
• B) $650
• C) $750
• D) $700

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Definitions:

Other Income/Expense

Non-operational revenue or costs that are not related to the primary activities of a business, such as gains or losses from investments.

Loss

A situation where business expenses exceed revenues, resulting in a negative net income.

Disposal of Asset

The process of selling, scrapping, or otherwise disposing of a company's asset.

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