The Costing of Inventories at Standard Cost for External Financial

question 76

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 costs and standard costs.
• D)in accordance with generally accepted accounting principles if significant differences do not exist between actual and standard costs.

---

Definitions:

Investment Requirement

The minimum amount of money needed to invest in a particular venture, fund, or project.

Financial Plan

A comprehensive evaluation of an individual's or organization's current and future financial state by using currently known variables to predict future income, asset values, and withdrawal plans.

Forecast The Future

The practice of making predictions based on current and historical information, often using statistical models and analysis.

Depreciation Expense

The deliberate partitioning of the expenditure for a solid asset over its period of utility.