Which of the Following Is Not an Acceptable Method for Accounting

question 24

Multiple Choice

Which of the following is not an acceptable method for accounting for by-products in a joint manufacturing process?

• A)Costs before the split-off point are allocated to by-products.
• B)The estimated sales value of the by-product reduces the cost of the main product.
• C)The joint costs allocated to by-products are included in an account called "By-products Inventory."
• D)In some instances, the revenue from selling by-products may be treated as "other income" on the income statement.

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Definitions:

Monopoly Firms

Entities that are the sole providers of a product or service in a market, facing no competition.

Downward-Sloping

A term often used in economics to describe a line or curve on a graph that demonstrates a decrease in one variable as another increases.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at each price.

Perfectly Elastic

Refers to a situation in which the quantity demanded or supplied changes infinitely in response to any change in price.