Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

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Multiple Choice

If 25 ice cream cones cost $35.00 and a company uses the perpetual inventory system, what is the cost per unit that should be recorded in the inventory account for each cone?

$0.70

$1.25

$1.40

$1.75

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Verified step by step guidance

Step 1: Understand the problem. The goal is to calculate the cost per unit of ice cream cones, which will be recorded in the inventory account under the perpetual inventory system. This involves dividing the total cost by the number of units.

Step 2: Identify the given values. The total cost of 25 ice cream cones is $35.00, and the number of units (cones) is 25.

Step 3: Use the formula for cost per unit: $ \text{Cost per unit} = \frac{\text{Total Cost}}{\text{Number of Units}} $.

Step 4: Substitute the given values into the formula: $ \text{Cost per unit} = \frac{35.00}{25} $.

Step 5: Perform the division to determine the cost per unit. This value will be recorded in the inventory account for each cone under the perpetual inventory system.