The GASB Concept Statements Indicate That in Certain Instances a Remeasured

question 18

Multiple Choice

The GASB concept statements indicate that in certain instances a remeasured value for an asset or liability should be reported on the financial statements. Which of the following is not one of the methods recommended by the GASB for remeasured amounts?

• A) Historical cost.
• B) Lower of cost or market.
• C) Fair value.
• D) Replacement cost.

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Definitions:

Standard Cost System

An accounting method that uses cost standards for material, labor, and overhead charges to control costs and assess operational efficiency.

Direct Labor Standards

Direct Labor Standards define the expected labor time and cost necessary to produce a unit of product, facilitating budgeting and performance evaluation.

Work in Process

Inventory category that includes items currently being manufactured but not yet completed.

Standard Cost System

A standard cost system is an accounting method that uses cost estimates to predict the cost of production under normal conditions.