Items Should Be Reported as Part of the Company's "Inventory

question 23

Multiple Choice

Items should be reported as part of the company's "inventory" at year end, if they are

• A) Sold during the period.
• B) Determined to be part of cost of goods sold.
• C) Purchased from a creditor, available for sale, and paid for the following year.
• D) Held in anticipation of an increase in market value.

---

Definitions:

Short Run

A time period in economics where at least one factor of production is fixed, limiting the ability of businesses to adjust to changing market conditions.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to market balance.

Demand Curve

is a graph showing the relationship between the price of a good or service and the quantity demanded by consumers, typically downsloping to indicate that lower prices increase demand.

Competitive Firm

A company that operates in a market with many competitors, facing a highly elastic demand curve for its product because many substitutes are available.