Which of the Following Are the Two Basic Approaches to Analysing

question 10

Multiple Choice

Which of the following are the two basic approaches to analysing the cost functions of FIs?

• A) Basic indicator approach and standardised approach.
• B) Standardised approach and advanced measurement approach.
• C) Production approach and intermediation approach.
• D) Basic indicator approach and advanced measurement approach.

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Definitions:

FIFO Costing

An inventory valuation method that assumes that the first items placed in inventory are the first ones sold, standing for First In, First Out.

Unit Costs

The cost incurred by a company to produce, store, and sell one unit of a particular product or service.

Direct Materials

Raw materials that can be directly traced to the production process of a good or service, constituting a significant part of the total cost of production.

Weighted Average Method

A method for calculating the cost of goods sold and the final inventory value by using the average cost of all items available for sale during the accounting period, weighted by quantity.