A Company Uses a Perpetual Inventory System, and Follows GAAP

question 175

Multiple Choice

A company uses a perpetual inventory system, and follows GAAP in preparing its external financial statements. At the end of 2002, the balance in the inventory account was $66,000; $6,000 of those goods were purchased f.o.b. shipping point and did not arrive until 2013. Purchases in 2013 were $30,000. The perpetual inventory showed an ending inventory of $72,000 for 2013. A physical count of the goods on hand at the end of 2013 showed an inventory of $60,000. What should the company report on its 2013 income statement for cost of goods sold?

• A) $24,000
• B) $30,000
• C) $36,000
• D) $42,000

Evaluate the decision-making process related to financing with debt and understanding the time value of money concept.

Understand the advantages and methods of collecting firsthand data through surveys.

Grasp the importance of documenting sources in reports to avoid plagiarism and strengthen arguments.

Identify and differentiate between primary and secondary research sources.

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Definitions:

Granulosa Cells

Cells that surround the developing egg in the ovary and play a crucial role in the maturation of the oocyte and production of hormones like estrogen.

Androgens

A group of hormones that play a role in male traits and reproductive activity; present in both males and females.

Estradiol

A major form of estrogen, a hormone involved in the development and regulation of the female reproductive system and secondary sexual characteristics.

Endometrium

The inner lining of the uterus that thickens during the menstrual cycle in preparation for potential pregnancy.