When Ending Inventories Are High, Inaccurate Measurement of Percentage of Completion

question 43

Multiple Choice

When ending inventories are high, inaccurate measurement of percentage of completion:

• A) does not affect cost reports
• B) distorts cost reports in this period.
• C) distorts cost reports in this period and next period.
• D) causes higher spoilage costs this period and next period

---

Definitions:

Indirect Order

A communication method where the main point or essential information is placed later in the message, often used in sensitive situations to prepare the reader before receiving bad news or complex information.

Information Needed

This term implies the specific details or data required to fulfill a request or to solve a problem.

Executive Summary

A concise overview of a document or report's key points, designed to provide readers with a quick and easy understanding of its main content.

Letter of Transmittal

A formal document accompanying a report or proposal that provides an overview and specifies the document's purpose.