If the Government Decrees That Bottle Tops Will Be Treated

question 249

Multiple Choice

If the government decrees that bottle tops will be treated as money, then a bottle top

• A) can still never be money because it has so little intrinsic value.
• B) is called fiat money.
• C) will not function well as a unit of account.
• D) will serve well for international trade.

---

Definitions:

Lower of Cost or Market

An accounting principle requiring inventory to be recorded at the lower of its original cost or its current market value.

Inventory Valuation

The method used to assign cost to inventory for the purposes of accounting, vital for determining cost of goods sold and ending inventory values.

Net Realizable Value

The estimated selling price of goods minus the costs of their sale or disposal, used in assessing the value of inventory and receivables.

Replacement Cost

The cost to replace an asset or item at current market prices, without deduction for depreciation.