Which Statement Is NOT True Regarding the Sales Method of Accounting

question 144

Multiple Choice

Which statement is NOT true regarding the sales method of accounting for byproducts.

• A) The method makes no journal entries until the byproduct is sold.
• B) This method is the preferred method because of the matching principle.
• C) Revenues of the byproduct can be recorded in the income statement as revenue.
• D) Revenues of the byproduct can be recorded as a reduction of cost of goods sold in the income statement.
• E) No value is attached to the byproduct inventory.

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Definitions:

Economy Changing

Refers to the dynamics and shifts occurring over time within an economic system, affecting growth, employment, and resources distribution.

Labor Demand

The total amount of workers that employers are willing and able to hire at a given wage rate, in a given time period.

Firm's Product

The goods or services produced by a firm, designed to meet consumer needs or desires, distinguishing the firm in its market.

Frictional Unemployment

Short-term unemployment that arises from the process of matching workers with jobs.