The Underlying Basis for the Use of Historical Cost Is

question 54

Multiple Choice

The underlying basis for the use of historical cost is the:

• A)relevance principle.
• B)matching principle.
• C)comparability principle.
• D)reliability principle.

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Definitions:

Beginning Inventory

The amount of merchandise prepared for sale at the start of a fiscal period.

Average Inventory

The mean value of the inventory over a specific time period, calculated by averaging the inventory levels at various times.

Ending Inventory

The overall price of inventory on offer at the termination of an accounting term.

Beginning Inventory

The initial worth of a firm's stock before any transactions, such as buys or sales, happen at the beginning of an accounting cycle.