Which Statement Is NOT True Regarding the Sales Method of Accounting

question 86

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 are not recorded at the time of production.
• E)No value is attached to the byproduct inventory.

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Definitions:

Expected Inflation

The anticipated rate at which prices of goods and services will rise over a period.

Spot Rate

The prevailing market rate at which a specific asset is available for purchase or sale with immediate effect.

Real Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing and the true return on lending.

Inflation Rate

The growth rate of the overall cost level for goods and services, undermining the efficacy of monetary resources.