The Primary Basis of Accounting for Inventories Is Cost

question 20

Multiple Choice

The primary basis of accounting for inventories is cost.A departure from the cost basis of pricing the inventory is required where there is evidence that when the goods are sold in the ordinary course of business their

• A)selling price will be less than their replacement cost.
• B)replacement cost will be more than their net realizable value.
• C)cost will be less than their replacement cost.
• D)future utility will be less than their cost.

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Definitions:

Alternatives

Different options or choices available in any given situation, allowing for flexibility in decision-making processes.

Activities

Engagements or tasks that individuals or groups undertake, often with a specific purpose or objective in mind.

Attitudes

Mental and emotional entities which predispose an individual's response to various situations, objects, or people.

Actual Results

The concrete outcomes or outputs that are achieved at the end of a project or period, often compared against planned objectives or goals.