Which of the Following Statements Is Correct with Respect to the Differences

question 33

Multiple Choice

Which of the following statements is correct with respect to the differences between using the weighted-average method or the FIFO method of preparing a process production report?

• A)Use of FIFO is acceptable for GAAP,while use of weighted-average method is not.
• B)FIFO is simpler to use than the weighted-average method.
• C)Use of FIFO or weighted-average results in large differences for companies that maintain minimal work-in-process inventory.
• D)The weighted-average method is often simpler,less costly to prepare,and provides useful information for decision-making.

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Definitions:

Unmerchantable

Referring to goods or products that fail to meet minimum quality standards for sale to consumers or are otherwise unfit for their intended purpose.

Merchantability

A warranty that goods sold meet reasonable quality and usage standards as per the market.

Implied Warranty

A legal assumption that a product will meet certain standards of quality and reliability even if not explicitly stated.

Merchantability

Relates to the guarantee that a product sold meets reasonable expectations of performance and quality as understood in the marketplace.