A Company Sells a Climbing Kit and Uses the Perpetual

question 108

Multiple Choice

A company sells a climbing kit and uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during January were as follows: If the ending inventory is reported at $276, what inventory method was used?

• A) LIFO method.
• B) FIFO method.
• C) Weighted average method.
• D) Specific identification method.
• E) Retail inventory method.

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Definitions:

Intangible Personal Property

Property that does not have a physical presence but holds value, such as patents, copyrights, trademarks, and financial assets.

Substance

A fundamental or essential component of a matter; often refers to the material from which something is made.

Gift Causa Mortis

A gift made in contemplation of imminent death where the giver transfers personal property to another, with the gift becoming permanent if the giver dies as contemplated.

Exclusive Possession

The right of an individual or entity to use and control property to the exclusion of others.