The Ramien Store Held Inventory Items at the End of 2014.Which

question 2

Multiple Choice

The Ramien Store held inventory items at the end of 2014.Which items should Ramien include as part of its total inventory cost?

• A)Freight incurred in shipping goods to customers.
• B)Annual income taxes paid for operations.
• C)Cost of storing inventory before it is sold.
• D)Cost of salaries of clerks that sell the inventory items.

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Definitions:

U.S. GAAP

United States Generally Accepted Accounting Principles, which are a set of rules and standards for financial reporting.

Long-Lived Asset

Assets used in the operations of a business that are expected to provide economic benefits for a period longer than one year.

Net Book Value

The value of an asset after subtracting accumulated depreciation from its original cost, synonymous with carrying value but rephrased for clear understanding.

Discontinued Item

Pertains to the gains or losses from operations of a component of a business that has been disposed of or is held for sale.