Which of the Following Statements Is Correct

question 51

Multiple Choice

Which of the following statements is correct?

• A)Cost of goods available for sale is allocated between costs of goods sold and inventory at year-end.
• B)A purchase of inventory on credit increases both cost of goods available for sale and cost of goods sold.
• C)Purchases of inventory during a period less that period's cost of goods sold equals ending inventory regardless of the beginning inventory amount.
• D)Cost of goods available for sale equals ending inventory plus purchases.

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Definitions:

Private Bargaining

The process of negotiating terms directly between parties without external intervention.

Externality

An outcome from economic behavior that impacts individuals not directly involved, which may be beneficial or harmful.

Initial Assignment

The initial distribution or allocation of tasks, responsibilities, or resources at the start of a project or process.

Liability Rule

A legal principle that allows for compensation when someone's action causes harm or loss to another, even without an agreement between the parties.