Which of the Following Is NOT a Reason Why Inventory

question 84

Multiple Choice

Which of the following is NOT a reason why inventory is a complex accounting and auditing area?

• A)Diversity of items in inventory.
• B)Low volume of activity.
• C)Easily transportable.
• D)Difficulty in applying the lower of cost or market principle.

---

Definitions:

Notes Receivable

Claims or promissory notes that entitle the holder to receive payments from debtors, typically in the future, and recorded as assets on the balance sheet.

Deposit Method

An accounting approach used for recognizing revenue and expenses related to transactions where payment is received before the delivery of goods or services.

Sales Price

The amount of money for which a product or service is sold in the marketplace.

Significant Production

Significant production describes a level of manufacturing or output that markedly influences a company's overall capacity and inventory levels.