For Each of the Following Characteristics of a Business Organization,state

question 92

Essay

For each of the following characteristics of a business organization,state whether it applies to a sole proprietorship (SP),partnership (P)or a corporation (C).There may be more than one correct answer for a characteristic.

Understand and apply the concept of the lower of cost or market rule in inventory valuation.

Differentiate between non-cancellable and cancelable purchase obligations and their accounting treatment.

Recognize the application and impact of the gross profit method on inventory estimation and valuation.

Identify the conditions under which inventory can be valued at selling price less distribution costs.

---

Definitions:

Deposits

Money placed into a bank account or given as a security for a contractual agreement.

Semi-annually

Occurring twice a year, typically every six months.

Quarterly Payments

Payments made four times a year, typically used in the context of dividends or loan repayments.

Debt

An amount of money borrowed by one party from another, which needs to be repaid usually with interest.