Which of the Following Amounts Would Be Reported for Inventory

question 29

Multiple Choice

Which of the following amounts would be reported for Inventory on the balance sheet if the cost of an item is $80,the current selling price is $100 and the current replacement cost is $75?

• A) $100
• B) The average of $75 and $80
• C) $80
• D) $75

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to fund its day-to-day operations.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated by adjusting the starting inventory for purchases and sales during the period.