Which of the Following Is Not a Characteristic Used to Judge

question 65

Multiple Choice

Which of the following is not a characteristic used to judge whether an entity is a reporting entity that should prepare general purpose financial reports?

• A)The structure of the entity,e.g.whether it is a sole trader or a company
• B)Whether ownership and management are separate
• C)Whether the entity has economic or political importance
• D)The size or indebtedness of the entity

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Definitions:

Perpetual Inventory System

An inventory system that updates the quantity and cost of inventory immediately following purchase or sale activities.

Merchandise Inventory

Goods and products that a retailer, wholesaler, or distributor holds in stock with the intent to sell them for profit.

Cost of Goods Sold

The total direct costs attributable to the production of goods sold by a company during a specific period.

Sales Returns & Allowances

Transactions where sellers accept returned goods from buyers, or provide a price reduction or discount, reducing the initial sales revenue.