Which of the Following Is Not an Inventory Carrying Cost

question 115

Multiple Choice

Which of the following is not an inventory carrying cost?

• A)The cost of storage
• B)The cost of borrowing to acquire inventory
• C)The costs of spoilage, shrinkage, and breakage
• D)The cost of customer complaints about unavailable product

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Definitions:

GAAP

Generally Accepted Accounting Principles, which are a common set of accounting rules and standards used in the United States.

Marketable Securities

Financial instruments that can be quickly converted into cash with minimal loss in value.

Unrealized Increase

The increase in value of an asset that has not yet been sold or disposed of. It represents potential profit, but it is not reflected in the financial statements until the gain is realized.

APB Opinion No. 22

Guidance issued by the Accounting Principles Board on the disclosure of accounting policies, requiring firms to include a summary of significant accounting policies in their financial statements.