The Diagram Below Shows Two Production Possibilities Boundaries for Country

question 61

Multiple Choice

The diagram below shows two production possibilities boundaries for Country X.
FIGURE 1- 4
-Refer to Figure 1- 4.If Country X is currently producing at point A,it could move to point B if

• A)the cost of producing capital goods were to increase.
• B)some resources were switched from the consumer goods industries to the capital goods industries.
• C)the cost of producing consumer goods were to increase.
• D)some resources were switched from the capital goods industries to the consumer goods industries.
• E)Country X is no longer able to produce the quantity of capital goods at point A.

Analyze the effects of inventory estimation methods on the cost of goods sold and ending inventory valuation.

Comprehend the treatment of goods in transit and consignment under inventory accounting.

Recognize the specific identification method and its application criteria under GAAP and IFRS.

Understand the implications of LIFO and FIFO cost flow assumptions under GAAP and IFRS.

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Definitions:

Primary Industry

The sector of the economy that extracts and harvests natural resources directly from the Earth, such as agriculture, mining, and forestry.

Normal Goods

Goods for which demand increases as the income of the buyer increases, and vice versa.

Income Increase

A rise in the amount of money received, especially on a regular basis, through work or investments.

Substitute

A product or service that can be used in place of another to satisfy the same want or need.