When Considering Pricing of Inventory,three Things Are Important

question 74

Multiple Choice

When considering pricing of inventory,three things are important.The first two are that the method must be in accordance with an acceptable financial accounting framework,and the application of the method must be consistent from year to year.What is the third?

• A)The input edits over the data entry of prices must be robust.
• B)The cutoff testing for the use of supplier invoices should be carefully done.
• C)The cost versus market value must be considered.
• D)The freight should always be included in the cost of the inventory.

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Definitions:

Convertible

Refers to financial instruments or securities, like bonds or preferred stock, that can be transformed into another form, usually common stock, under certain conditions.

Dilutive Security

A financial instrument, like an option or convertible bond, that may reduce earnings per share by increasing the total number of shares outstanding.