Which Is the Most Accurate Statement

question 155

Multiple Choice

Which is the most accurate statement?

• A)There is basically no real difference between shutting down and going out of business.
• B)One big difference between shutting down and going out of business is that after you've shut down you're still paying bills,but when you've gone out of business,there are no more bills to pay.
• C)When you shut down you must still pay your variable costs,but when you go out of business you have no costs at all.
• D)Shutting down is a long run option,while going out of business is a short run option.

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Definitions:

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.

Balance Sheet

A document detailing a business's resources, financial obligations, and the equity of its shareholders at a given time.

LIFO

An accounting method for valuing inventory that assumes the most recently acquired items are sold first, with costs of older inventory used for valuation.

Ending Inventory Balance

The value of unsold goods that a company holds at the end of an accounting period.