Under the FIFO Flow Assumption, the Cost of These Items

question 9

Multiple Choice

Under the FIFO flow assumption, the cost of these items to be included in inventory in the company's year-end balance sheet is:

• A) $36,000.
• B) $36,500.
• C) $42,000.
• D) $37,500.

---

Definitions:

Bailment

A legal relationship where physical possession of personal property, or a chattel, is transferred from one party to another, with the understanding that the property will be returned or otherwise disposed of according to the owner's instructions.

Bailor

A person or entity that entrusts their property into the hands of another, called the bailee, under an agreement for a specific purpose.

Bailee

An individual or entity that is given temporary possession, but not ownership, of personal property by another person (the bailor) under a bailment agreement.

Accidental Damage

Accidental damage refers to harm that occurs unexpectedly and unintentionally, resulting in loss or injury not caused by deliberate actions.