Kappa Uses the FIFO Assumption with the Periodic Inventory Method

question 16

Multiple Choice

Kappa uses the FIFO assumption with the periodic inventory method. $\begin{array}{lccc}&\text { Units }&\text {Unit }&\text {Total }\\&&\text{Cost}&\text{Cost}\\\text { Beginning Inventory } & 10 & \$ 10 & \$ 100 \\\text { Purchase } & 10 & \$ 12 & \$ 120 \\\text { Purchase } & 8 & \$ 9 & \$ 72\end{array}$ Sales during year were 14 units.What was the value assigned to the closing stock of this item at the end of the period?

• A)$84
• B)$98
• C)$108
• D)$144

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Definitions:

Wholesale Price

The cost of goods sold in bulk to retailers or distributors, generally lower than retail price.

Seal

A device or symbol used to authenticate documents as genuine or to signify approval or ratification.

Consideration

A concept in contract law, referring to something of value exchanged between parties as part of an agreement.

Gratuitous Promise

A voluntary promise or agreement without consideration, where the promisor is not legally bound to fulfill the promise.