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:

Leased

A contractual arrangement where an owner of a property allows another party to use the property for a specified time in exchange for periodic payments.

Ownership

The legal right or title to possess, use, control, and dispose of an asset, property, or resource, recognized by law.

Purchasing

The process of sourcing and acquiring goods and services needed by an organization or individual.

Valid Gift

A legal principle referring to a voluntarily transfer of property or a right from one individual to another, without any consideration or payment.