Indigo Ltd Uses the FIFO Assumption with the Periodic Inventory

question 14

Multiple Choice

Indigo Ltd uses the FIFO assumption with the periodic inventory method.
Units Unit Total
Cost cost
Beginning inventory 12 $10 $120
Purchase 10 $12 $120
Purchase 6 $11 $66
Sales during year were 16 units. What was the value assigned to the closing stock of this item at the end of the period?

• A) $66
• B) $120
• C) $138
• D) $144

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Definitions:

Unilaterally Mistaken

A situation where only one party to an agreement is confused about the terms or subject matter, potentially affecting the validity of the contract.

Contractual

Pertaining to, or characterized by, a contract or agreement between two or more parties.

Damages Recoverable

The amount of money that can be claimed or awarded as compensation for loss or injury in a legal action.

Dollar Limits

The maximum amount of money that can be claimed from a jurisdictional perspective or under a specific insurance policy.