Ignoring a Write-Off of Inventory Because It Will Not Make

question 94

Multiple Choice

Ignoring a write-off of inventory because it will not make a difference to financial statement users is an example of:

• A)conservatism.
• B)consistency.
• C)materiality.
• D)entity.

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Definitions:

Depreciation

The process by which capital assets decrease in value over time due to use, wear and tear, or becoming outdated.

Gross National Product

A measure of a nation's total economic output, including the value of all goods and services produced by its citizens, regardless of where they are located.

Depreciation

A reduction in the value of an asset over time, due to wear and tear or obsolescence.

Intermediate Goods

Goods that are used as inputs in the production of final goods, not intended for final consumption.