Which of the Following Items Affect the Amount of Direct

question 65

Multiple Choice

Which of the following items affect the amount of direct material that must be purchased during a period?
I.The amount of raw material in beginning inventory
II.The amount of raw material in ending inventory

• A)Only I
• B)Only II
• C)Both I and II
• D)Neither I nor II

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Definitions:

FASB

The Financial Accounting Standards Board (FASB) is a private, non-profit organization standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest.

Temporary Difference

A difference that arises between the tax bases of assets or liabilities and their carrying amount in the financial statements, which will result in taxable or deductible amounts in future years.

Bad Debts Expense

The cost to a company resulting from the inability to collect a receivable because a customer is unable to fulfill their payment obligations.

Product Warranty Costs

Expenses incurred by a company due to repairing or replacing products that fail to perform satisfactorily within a given warranty period.