For a Company That Uses ASPE, the Required Year-End Journal

question 41

Multiple Choice

For a company that uses ASPE, the required year-end journal entry to record an impairment loss includes

• A) a debit to Loss on Impairment and a credit to Accumulated Impairment Losses.
• B) a debit to Other Comprehensive Income and a credit to Accumulated Impairment Losses.
• C) a debit to Loss on Impairment and a credit to the related asset.
• D) a debit to Other Comprehensive Income and a credit to the related asset.

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Definitions:

First-In, First-Out

An inventory valuation method where the first items placed in inventory are the first ones to be used or sold.

Conversion Equivalent Units

A metric used in cost accounting to quantify the amount of work done on partially finished goods, measured in full unit equivalents.

First-In, First-Out

A method of valuing inventory in which the first items bought or manufactured are the first ones to be sold or utilized.

Conversion Costs

The combined costs of direct labor and manufacturing overhead required to convert raw materials into finished products.