T-Shirt City Uses a Periodic Inventory System

question 152

Multiple Choice

T-Shirt City uses a periodic inventory system. During the first year of operations, the company made four purchases of a particular product. Each purchase was for 500 units and the prices were: $9 per unit in the first purchase, $10 per unit in the second purchase, $12 per unit in the third purchase, and $13 per unit in the fourth purchase. At year-end, 650 of these units remained unsold. Compute the cost of goods sold under the FIFO method and LIFO method, respectively.

• A) $13,700 (FIFO) and $16,000 (LIFO).
• B) $8,300 (FIFO) and $6,000 (LIFO).
• C) $16,000 (FIFO) and $13,700 (LIFO).
• D) $6,000 (FIFO) and $8,300 (LIFO).

Comprehend the significance and calculation of the days' sales uncollected ratio and its implications for cash flow and credit management.

Understand the principles of cash management, including internal control procedures for cash receipts and disbursements.

Identify and react to discrepancies in cash management, such as overages, shortages, and errors in recording transactions.

Learn the documentation process in purchasing, including the use of purchase requisitions, purchase orders, and receiving reports.

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Definitions:

Assignment

The allotment or designation of a task, duty, or responsibility to someone.

Co-payment

A co-payment is a fixed amount paid by a patient for receiving a particular medical service, with the remaining balance covered by insurance.

Professional Services

Services provided by individuals or companies that require a high level of training or education, typically in specialized fields.

Specified Amount

A particular or set quantity determined or designated in a given context.