An Example of an Inventory Accounting Policy That Should Be

question 103

Multiple Choice

An example of an inventory accounting policy that should be disclosed is the

• A) effect of inventory profits caused by inflation.
• B) classification of inventory into raw materials,work in process,and finished goods.
• C) identification of major suppliers.
• D) method used for inventory costing.

---

Definitions:

Clearing Corporation

An entity that facilitates the settlement of transactions in the financial markets by ensuring the transfer of funds and securities.

Net Position

The difference between the total number of long and short positions that a trader or institution holds in a particular security, currency, or commodity.

Open Interest

The total number of outstanding derivative contracts, such as futures or options, that have not been settled.

Spread Position

In trading, holding a combination of options positions that offset each other, to capitalize on movements in market prices or volatility.