Which of the Following Is Not True

question 234

Multiple Choice

Which of the following is not true?

• A)Acquisition cost for a merchandising firm includes the costs incurred to purchase and transport the inventory prior to sale.
• B)Acquisition cost for a manufacturing firm includes the direct material, direct labor, and manufacturing overhead cost to produce the inventory.
• C)If the market values of inventory items decline below acquisition cost prior to sale, firms must reduce their balance sheet carrying values using the lower of cost or market method.
• D)If the market values of inventories increase during a period, IFRS permits firms to recognize the unrealized gain to the extent that the firm had previously recognized an unrealized loss on those inventory items.
• E)If the market values of inventories increase during a period, U.S.GAAP permits firms to recognize the unrealized gain to the extent that the firm had previously recognized an unrealized loss on those inventory items.

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Definitions:

Valid

Legitimately founded on fact or evidence, sound and applicable.

Job Rotation

A method where employees are moved between two or more jobs in a planned manner to expose them to different experiences and wider aspects of an organization, enhancing versatility and reducing monotony.

Processes

Defined as a series of actions or steps taken to achieve a particular end.

Subsidiary

A company that is controlled by another corporation, often referred to as the parent company, through ownership of a majority of its voting stock.