Net Income or Net Profit

question 98

Multiple Choice

Net Income or Net Profit

• A) Are the same
• B) Net Income is less than Net Profit
• C) Net Profit is the profit before expenses are deducted
• D) None of the above

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Definitions:

FIFO

First In, First Out, an inventory valuation method where goods purchased or produced first are sold or used first.

LIFO

An inventory valuation method, "Last-In, First-Out," where the most recently produced items are recorded as sold first.

Average Cost

A method of inventory valuation which calculates the cost of goods sold based on the average cost of all similar items in inventory.

Periodic Inventory System

An accounting method where the inventory is physically counted at specific intervals to determine the cost of goods sold and the ending inventory balance.