Which of the Following Statements About a Growing Crop Expected

question 2

Multiple Choice

Which of the following statements about a growing crop expected to be sold within the next reporting cycle is not true?

• A) It should never be classified as inventory
• B) It should always be classified as a current asset
• C) It should always be classified as inventory
• D) It is in the process of production

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Definitions:

Net Realisable Value Method

An accounting technique used to value inventory or assets, determining the estimated selling price in the ordinary course of business minus any costs necessary to make the sale.

By-product Revenue

Revenue generated from secondary products produced during the manufacturing process of a primary product.

Joint Process Costs

Costs incurred during a production process that yields multiple products simultaneously until the point of separation where products can be identified individually.

Make or Buy Decision

A decision-making process where a business evaluates the cost benefits of manufacturing a product in-house versus purchasing it from an external supplier.