For Interim Reporting, Which of the Following Statements Is True

question 47

Multiple Choice

For interim reporting, which of the following statements is true?

• A)​Under a standard cost system, unplanned or unanticipated variances should be deferred at interim reporting dates.
• B)​Under the LIFO method, recognition of layer liquidations, thought to be temporary, are postponed by using replacement cost in the calculation of interim cost of goods sold.
• C)​Under the lower of cost or market determination of ending inventory, a gain may not be recognized in an interim period.
• D)​All of these statements are true.

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Definitions:

Disposable Income

The amount of money available to households for making purchases and savings after the removal of income taxes.

Saving

The act of setting aside a portion of current income for future use, or the portion of income not spent on current expenditures.

MPC (Marginal Propensity to Consume)

The proportion of additional income that is spent on consumption.

Saving

The act of setting aside money for future use instead of spending it immediately.