If Inventory Is a Material Amount,what Method of Accounting Is

question 19

Multiple Choice

If inventory is a material amount,what method of accounting is acceptable for a sole proprietorship to use?

• A)The cash method.
• B)Accrual method.
• C)Hybrid method.
• D)Both Accrual method and Hybrid method.

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Definitions:

Unconscionability

A term referring to an agreement that is so one-sided or unfair that it shocks the conscience and is therefore unenforceable under the law.

Finance Lease

A type of lease arrangement where the lessee is considered the de facto owner of the leased asset, being responsible for maintenance and other associated costs, and typically involves commercial equipment or vehicles.

Three Parties

A term generally used in contracts or legal situations where three distinct entities are involved.

Lease

A contractual agreement whereby one party grants another the right to use property, equipment, or facilities for a specified period in exchange for payment.