Which of the Following Statements Is INCORRECT Regarding the Overriding

question 62

Multiple Choice

Which of the following statements is INCORRECT regarding the overriding objectives underlying inventory standards and guide management?

• A)Report an inventory cost on the statement of financial position that is representative of the inventory's recent cost.
• B)Choose an approach that corresponds as closely as possible to the physical flow of goods.
• C)Use the same method for all inventory assets that have similar economic characteristics.
• D)It is permissible under ASPE to use any inventory method, including LIFO.

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Definitions:

Administrative Expense

Expenses that are not directly tied to the production of goods or services, including salaries of executive officers, legal and office expenses.

Sales Commissions

Financial compensation paid to sales representatives, usually a percentage of the sales they generate, as an incentive to increase sales performance.

Indirect Labor

Labor costs of employees who support the production process but are not directly involved in the active production of goods or services.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor costs.