If Materials Are Carried in the Direct Materials Inventory Account

question 4

Multiple Choice

If materials are carried in the direct materials inventory account at standard cost, then it is reasonable to assume that the:

• A) raw materials inventory account is understated.
• B) price variance is recognized when materials are purchased.
• C) company does not follow generally accepted accounting principles.
• D) price variance is recognized when materials are placed into production.

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Definitions:

5-Membered Ring

A cyclic structure in organic chemistry consisting of five atoms, which can be of the same or different elements.

Amino Acid

An organic molecule that serves as the building block of proteins, containing both an amino group and a carboxyl group.

α-Carbon

Refers to the first carbon atom that attaches to a functional group in an organic molecule, playing a crucial role in the structure and reactivity of molecules.

Biological pH

The measure of acidity or alkalinity within living organisms or biological systems, crucial for maintaining homeostasis and enzymatic activities.