Which of These Is Not One of the Areas Where

question 15

Multiple Choice

Which of these is not one of the areas where major judgement is required in accounting for inventory?

• A) deciding when to apply the 'lower of cost and net realisable value' rule
• B) the choice of costing method (FIFO, weighted average, etc.)
• C) counting the inventory items when carrying out a stocktake
• D) None of the above, i.e. all require major judgement.

---

Definitions:

Compounded Annually

Interest calculation method where the interest is added to the principal sum once a year, so each year’s interest earnings are based on the principal plus the accumulated interest.

RRSP Contributions

Money placed into a Registered Retirement Savings Plan, intended to serve as retirement savings and provide tax benefits in Canada.

First Contribution

The initial investment or deposit made into a financial instrument or savings account.

Compounded Monthly

The process of calculating interest on an investment monthly and adding it to the principal, resulting in interest earned on the previous interest.