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?

Canned food products

Daily newspapers

Automobile spare parts

Office furniture

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Verified step by step guidance

Understand the single-period inventory model: This model is used for items that have a limited selling period or are perishable, meaning they cannot be sold after a certain time. Examples include seasonal goods or items with a short shelf life.

Analyze the characteristics of each inventory item: Canned food products have a long shelf life and can be sold over multiple periods. Daily newspapers have a very short selling period (usually one day) and become obsolete after that. Automobile spare parts and office furniture are durable goods that can be sold over extended periods.

Identify the inventory item that fits the single-period inventory model: Based on the analysis, daily newspapers are the only item that becomes obsolete after a single period and cannot be sold later.

Relate the concept to real-world applications: The single-period inventory model is commonly used for items like newspapers, event tickets, or seasonal fashion, where demand is limited to a specific time frame.

Conclude that daily newspapers warrant the use of the single-period inventory model due to their short selling period and perishability in terms of relevance.