Which of the Following Statements Is CORRECT

question 135

Multiple Choice

Which of the following statements is CORRECT?

• A) Time lines cannot be constructed where some of the payments constitute an annuity but others are unequal and thus are not part of the annuity.
• B) A time line is not meaningful unless all cash flows occur annually.
• C) Time lines are not useful for visualizing complex problems prior to doing actual calculations.
• D) Time lines can be constructed to deal with situations where some of the cash flows occur annually but others occur quarterly.
• E) Time lines can only be constructed for annuities where the payments occur at the end of the periods, i.e., for ordinary annuities.

---

Definitions:

Equivalent Units

A concept used in process costing that converts partially completed units into an equivalent number of fully completed units to accurately measure inventory and cost of goods sold.

Weighted-Average Method

A method of costing inventory that determines the cost of goods sold and the closing inventory by averaging the cost of all items available for sale throughout the period.

Ending Inventory

The worth of merchandise on hand for purchase at the conclusion of a financial period.

Equivalent Units

Equivalent units are a calculation in process costing that converts partially completed units into a number of equivalent fully completed units.