The Valuation of Inventories May Be on the Basis Of

question 72

Multiple Choice

The valuation of inventories may be on the basis of:

• A) the lower of direct cost and recoverable amount.
• B) regular revaluations by classes of inventories undertaken at the end of the period.
• C) the weighted average of market value and absorption cost over the period.
• D) the lower of cost and net realisable value.

---

Definitions:

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Fair Market Value

The estimated price at which an asset would sell in the marketplace when both buyer and seller are reasonably knowledgeable and willing parties.

Accountant

A professional who performs accounting functions such as audits or financial statement analysis. Accountants can also advise on financial strategies and tax planning.

Gross Income

The total income earned by an individual or a business before any deductions or taxes are taken out.