Which Inventory Costing System Is Required by GAAP for Financial

question 109

Multiple Choice

Which inventory costing system is required by GAAP for financial reporting purposes?

• A)absorption costing
• B)standard costing
• C)direct costing
• D)variable costing

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Definitions:

Limited by Guarantee

A form of incorporation used primarily by non-profit organizations where the liability of the members is limited to the amount they agree to contribute if the company is wound up.

Equity

The residual interest in the assets of an entity after deducting liabilities, representing ownership interest.

Share Capital

Share capital refers to the amount of money a company has raised by issuing shares to shareholders, representing the ownership interest of the shareholders in the company.