Question 2 (1 point)

Which of the follwoing assumptions regarding the first-in first-out method is/ are correct

a

average cost per unit is calculated after each sale of goods

b

inventory items are assumed to be purchased in the order they are acquired

c

items in ending inventory do not reflect the most recent purchases

d

inventory items are assumed to be sold in the order they are acquired

Question 3 (1 point)

Trade discounts are provided by a manufacturer or wholesaler for the following reason:

a

a specific percentage discount provided to customers based on specific industry benchmark

b

a credit discount offered based on returned merchandise

c

a specific percentage discount provided to customers based on the quantities/ volume of goods purchased

d

a specific percentage discount provided to encourage the customer to engage in early payment of invoices

Question 4 (1 point)

Gross Profit Margin is calculated as follows

a

Cost of Goods Sold - Net Sales

b

Profit - Revenue

c

Net selling Price - Cost

d

Net Sales - Cost of Goods Sold

Question 5 (1 point)

If prices are following, the FIFO method of inventory valuation result in the lower value of closing stock.

True

False