Which of the Following Does the Cost of Inventories in a Merchandising

question 78

Multiple Choice

Which of the following does the cost of inventories in a merchandising entity include?
i. Purchase price of goods
ii. A deduction for all trade discounts
iii. The cost of transport to the entity
iv. Labour cost of customer service personnel

• A) All of the given answers
• B) i, ii and iii
• C) ii iii and iv
• D) i, ii and iv

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Definitions:

Inventory System

A mechanism for tracking the quantity, value, and movement of inventory through a business operation.

Periodic LIFO

An inventory valuation method applied at the end of an accounting period that assumes the last items added to inventory are the first sold.

Ending Inventory

The total value of unsold goods held by a company at the end of an accounting period.

Inventory System

Methods and procedures used to track materials, work-in-progress, and finished goods from acquisition through sale.