Which of the Following Is True Regarding Accounting for Inventories

question 28

Multiple Choice

Which of the following is true regarding accounting for inventories?

• A) GAAP permits use of either the consumption method or the purchases method.
• B) If inventories are significant, GAAP requires that an asset account be credited in order to record a fund balance reserve.
• C) Under the consumption method, Expenditures equal the amount of inventory received during the period.
• D) All of the above are true.

---

Definitions:

Callous Attitude

An insensitive and emotionally detached demeanor that shows a lack of empathy or concern for others.

Reclusive Behavior

A tendency to avoid social interactions and prefer solitude, often seen in various psychological conditions.

Aggression

Behaviors or actions characterized by hostility or violence towards others, often stemming from frustration or anger.

Anorexia Nervosa

An eating disorder characterized by an intense fear of gaining weight and a distorted body image, leading to restricted food intake and extreme thinness.