A Widely Used Method for Estimating the Value of Ending

question 90

Multiple Choice

A widely used method for estimating the value of ending inventory is the:

• A) the lower-of-cost-or-market method
• B) gross margin method
• C) periodic method
• D) perpetual method

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Definitions:

Net Income

The total profit or loss of a company after all expenses, including taxes and operating costs, have been deducted from total revenues.

Book Value

The net value of a company's assets as recorded on its balance sheet, subtracting liabilities from total assets.

Fair Value

The price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Mortgage

A loan used to purchase property, where the property itself serves as collateral until the loan is paid off.