Under the FIFO Method Sales Returns Are Costed Back into Inventory

question 22

Multiple Choice

Under the FIFO method sales returns are costed back into inventory at:

• A) an average cost price.
• B) the most recent cost price attached to a sale.
• C) a price determined by the accountant.
• D) the original cost price that was attached to the original sale.

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Definitions:

Ledger

A book or electronic record used to record all of a company's financial transactions in accounts.

Ledger

A book or collection of financial accounts where transactions are recorded, typically categorized by type.

Journal

A book or digital record where all financial transactions are initially recorded, also known as the book of first entry.

Financial Statements

Documents that provide an overview of a company's financial condition, including income statements, balance sheets, and statements of cash flows.