A Reason for Not Allocating All the Outgoings Incurred in Bringing

question 20

Multiple Choice

A reason for not allocating all the outgoings incurred in bringing the inventory to its present location and condition to the cost of inventory is:

• A) allocation may not make a material difference to reported profit or to the carrying amount of the inventory
• B) the allocation of some costs may be time-consuming
• C) incidental costs of acquisition may be minor
• D) all of the above are reasons

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Definitions:

Defense Mechanism

Psychological strategies unconsciously used by individuals to protect themselves from anxiety and to cope with reality.

Denial

A defense mechanism in which confrontation with a personal problem or with reality is avoided by denying the existence of the problem or reality.

Summer Job

Temporary employment typically taken during the summer months, often by students, to gain work experience or earn money.

Defense Mechanism

Psychological strategies brought into play by individuals or the psyche to manage stress, anxiety, and internal or external demands that are perceived as threatening.