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

5. Inventory

Inventory Errors

Financial Accounting

5. Inventory

Inventory Errors

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Multiple Choice

Which of the following inventory items warrants the use of a single-period inventory model?

Office furniture

Canned food products

Automobile spare parts

Daily newspapers

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Verified step by step guidance

Understand the single-period inventory model: This model is used for items that have a short selling period or are perishable, where unsold inventory at the end of the period has little to no value. Examples include newspapers, event tickets, or seasonal products.

Analyze the characteristics of each inventory item: Office furniture is durable and does not expire, canned food products have a long shelf life, and automobile spare parts are not time-sensitive. Daily newspapers, however, lose their value after the day they are published.

Identify the key feature of daily newspapers: They are highly time-sensitive and have a short lifecycle, making them a perfect candidate for the single-period inventory model.

Relate the single-period inventory model to the problem: Since the model is designed to minimize overstock and understock for items with a short selling period, daily newspapers fit this criterion.

Conclude that daily newspapers warrant the use of the single-period inventory model because they align with the model's purpose of managing inventory for perishable or time-sensitive items.