The Most Common Treatment of an End- Of- Year Immaterial

question 141

Multiple Choice

The most common treatment of an end- of- year immaterial overhead variance is to:

• A) allocate the variance among inventories and cost of goods sold
• B) ignore it
• C) close the variance to cost of goods sold in the current period
• D) capitalize the variance as a cost of finished goods inventory

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Definitions:

Market Value

The current quoted price at which an asset or service can be bought or sold in a public marketplace.

Economic Condition

Refers to the current state of the economy in a particular area or globally, often evaluated based on factors like GDP, employment rates, and inflation.

Credit Risk

The possibility that a borrower may default on any type of debt by failing to make required payments.

Balance Sheet

A financial statement that provides a snapshot of a company's financial position, listing assets, liabilities, and equity at a specific point in time.