The Primary Basis of Accounting for Inventories Is Cost

question 81

Multiple Choice

The primary basis of accounting for inventories is cost. A departure from the cost basis of pricing inventory is required where there is evidence that when the goods are sold in the ordinary course of business, their

• A) selling price will be less than their replacement cost.
• B) replacement cost will be more than their net realizable value.
• C) future utility will be less than their cost.
• D) cost will be less than their replacement cost.

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Definitions:

Preoperational Stage

The Preoperational Stage is the second stage in Piaget's theory of cognitive development, where children ages 2 to 7 begin to engage in symbolic play but lack the ability to perform operations or think logically.

Concrete Operational

A stage in Piaget's theory of cognitive development where children from about 7 to 12 years old develop logical thinking but still struggle with abstract concepts.

Formal Operational

The stage of cognitive development proposed by Piaget where individuals gain the ability to think abstractly and reason logically.

Reversibility

A concept in cognitive development referring to the ability to follow a line of reasoning back to its original starting point.