The Primary Basis of Accounting for Inventories Is Cost

question 93

Multiple Choice

The primary basis of accounting for inventories is cost. A departure from the cost basis of pricing the inventory is required when:

• A) The general price level has changed materially.
• B) The FIFO method of inventory valuation is adopted.
• C) There is evidence that the replacement cost of the goods at the date they are sold will be less than their cost when purchased.
• D) There is evidence that the net realizable value of the goods has declined.

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Definitions:

Meninges

The three layers of protective tissue that cover the brain and spinal cord, comprising the dura mater, arachnoid mater, and pia mater.

Dura Mater

The tough outermost membrane enveloping the brain and spinal cord.

Pia Mater

The delicate innermost layer of the meninges, the membranes surrounding the brain and spinal cord.

Cerebral Aqueduct

A narrow channel located in the midbrain that connects the third and fourth ventricles of the brain, allowing the flow of cerebrospinal fluid.