Asked by Xandrei Lugay on Jul 17, 2024
Verified
When the average cost method is applied in a periodic inventory system,
A) the sale of goods during the year will change the unit cost used for calculating ending inventory.
B) an average cost per unit is calculated after each purchase rather than at the end of the period.
C) an average cost per unit is calculated at the end of the period rather than after each purchase.
D) an average cost per unit is not calculated in the same manner that is used for a perpetual inventory system.
Periodic Inventory System
An inventory accounting system where the inventory is physically counted at specific intervals to determine the cost of goods sold and ending inventory value.
Average Cost
An inventory costing method where all costs of inventory purchased are averaged to determine the cost of goods sold and ending inventory value.
Unit Cost
The cost incurred to produce, acquire, or deliver one unit of a product or service.
- Learn about the effects of assorted inventory cost formulas on financial statements and the assessment of inventory.
Verified Answer
Learning Objectives
- Learn about the effects of assorted inventory cost formulas on financial statements and the assessment of inventory.
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