Which of the Following Scenarios Will Not Be Allowed Under

question 19

Multiple Choice

Which of the following scenarios will not be allowed under IFRS?

• A)A landscaping and garden retail store keeps piles of river rock,gravel,paving stones,and small decorative rocks in a fenced area on the side of the store.The store uses the most recent inventory costs when calculating cost of goods sold,since new inventory is piled on top of the older inventory.
• B)A grocery store strictly enforces a shelf rotation policy,so that older inventory is always at the front and sold first.The store uses the oldest inventory costs to calculate cost of goods sold.
• C)A farm chemical supplier maintains a large holding tank of chemicals,into which deliveries are periodically combined with the older chemicals.The supplier averages the cost of all inventory to calculate cost of goods sold.
• D)All of the above are acceptable under IFRS.

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Definitions:

Workers' Compensation

A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue their employer for the tort of negligence.

Crushing Injury

A type of injury where a part of the body is subjected to a high degree of force or pressure, often resulting in compression and significant damage to the area.

Net Earnings

The amount of income left after deductions, such as taxes and social security charges, have been subtracted from gross income.