Which of the Following Statements Is False Regarding the Reason

question 151

Multiple Choice

Which of the following statements is false regarding the reason that inventory costs are recorded as expenses when sold rather than when incurred?

• A)It gives the user's of the company's financial statements a clearer picture of profitability.
• B)It helps the company achieve a better matching of expenses with related revenues.
• C)It gives the company's accounting personnel more time to record inventory transactions.
• D)Inventory is an asset at the time it is acquired.

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Definitions:

Consequential Damages

These refer to indirect losses that result from a breach of contract, which were foreseeable and a direct consequence of the breach, such as lost profits or revenue.

Nominal Damages

Damages that are recoverable when a legal right is to be vindicated against an invasion that has produced no actual present loss.

Economic Loss

Financial damage that a person or entity suffers, which may include lost profits, costs of repair or replacement, and loss of use or opportunity.

Consequential Damages

Damages that are not a direct result of an act but are a secondary consequence, such as loss of future income.