Average Inventory Is Computed by Adding the Inventory at the Beginning

question 137

True/False

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by two.

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Definitions:

Liability

A financial obligation or debt that an individual or company owes to another party.

Asset

An economic resource owned or controlled by an entity that is expected to provide future economic benefits.

Income Summary

An account in the ledger that aggregates all the revenues and expenses for the period, used to transfer net income or loss to owner's equity.

Merchandise Inventory

Goods a company holds for the purpose of sale to customers.