The Two Types of Allowances That May Be Considered Before

question 83

Multiple Choice

The two types of allowances that may be considered before the division of profits and losses are:

• A) interest and salary allowances.
• B) interest and bonus allowances.
• C) salary and bonus allowances.
• D) bonus and liquidation allowances.

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Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus cost of goods sold.

Estimated Cost

An approximation of the cost of a product, project, or operation based on available information prior to actual expenditure.

FIFO Perpetual

A method of inventory valuation where goods are sold based on the order they were acquired, constantly updated to reflect transactions in real time.

LIFO Periodic

An inventory valuation method where the last items to be added to inventory are the first ones to be removed, applied at the end of an accounting period.