Under the FIFO Flow Assumption, the Cost of These Items

question 104

Multiple Choice

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

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

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Definitions:

Compounded

The process where interest is calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Annually

Annually means occurring once every year or pertaining to a period of one year.

Compounded

The process of earning interest on previously earned interest, leading to an increase in the total amount over time.

Monthly

Occurring or produced once a month.