An Inventory Balance Is Immaterial When

question 41

Multiple Choice

An inventory balance is immaterial when

• A)knowing the correct balance would not change the decision of an outside user of the financial statements
• B)the balance includes obsolete inventory
• C)inventory is a long term asset
• D)the cash balance exceeds the inventory balance

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Definitions:

2005 Bankruptcy Act

A significant reform of bankruptcy law aimed at making it more difficult for individuals to file for bankruptcy protection under Chapter 7 and encouraging Chapter 13 filings.

Chapter 7 Bankruptcy

A legal process allowing individuals to discharge most of their debts and start fresh financially.

Federal Income Tax

A tax levied by the United States federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Debtor in Possession

A debtor who retains possession and control of their assets while undergoing a reorganization under bankruptcy law, typically in Chapter 11 bankruptcy proceedings.