The Costing of Inventories at Standard Cost for External Financial

question 133

Multiple Choice

The costing of inventories at standard cost for external financial statement reporting purposes is

• A) not permitted.
• B) preferable to reporting at actual costs.
• C) in accordance with generally accepted accounting principles if significant differences exist between actual and standard costs.
• D) in accordance with generally accepted accounting principles if significant differences do not exist between actual and standard costs.

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Definitions:

Selling Expenses

Costs directly associated with the marketing and selling of products or services.

Bank Reconciliation

The process of comparing and adjusting the balance shown in an organization's bank statement, with the balance shown in its own financial records.

Deposits In Transit

Funds that have been deposited in a bank account but not yet recorded by the bank in the account balance, often due to timing differences.

NSF Check

A check that cannot be processed due to insufficient funds in the account it's drawn against, leading to a "non-sufficient funds" status.