All of the Following Statements Are True Except

question 58

Multiple Choice

All of the following statements are true except:

• A)U.S.GAAP and IFRS define fair value as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date."
• B)The fair value of an asset is an opportunity cost in the sense that fair value reflects an amount that the firm could receive if it sold the asset today.
• C)Current replacement cost is often used in U.S.GAAP to measure inventories whose usefulness has declined below acquisition cost.
• D)Net realizable value is similar, but not identical, to fair value.
• E)Net realizable value is not allowed by IFRS.

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Definitions:

Marginal Product

The additional output that is generated by employing one more unit of a particular input, holding other inputs constant.

Units of Output

The amount of product that a company produces in a given period.

Workers

Individuals engaged in any form of economic activity to earn a wage or salary, including both skilled and unskilled labor.

Total Cost

The complete cost of production that includes both variable and fixed costs.