According to the AASBs Conceptual Framework an Asset Is

question 9

Multiple Choice

According to the AASBs Conceptual Framework an asset is:

• A)a contingent item depending on another event occurs at some time in the future
• B)a future benefits controlled by an entity as the result of a future transaction
• C)a future benefit controlled by an entity as the result of past transactions or events
• D)an item that has a physical existence and can be converted into cash.

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Definitions:

Stock-Outs

Stock-outs occur when an item is no longer available for sale, typically because inventory levels have been depleted.

Periodic Inventory System

A method of inventory valuation where inventory counts and cost of goods sold calculations are made periodically at the end of a reporting period, instead of after each sale.

Cost Flow Assumptions

Accounting principles that dictate how the cost of goods sold and ending inventory values are calculated, such as FIFO (First-In, First-Out) or LIFO (Last-In, First-Out).

LIFO

"Last In, First Out" - an inventory valuation method where the most recently produced or purchased items are recorded as sold first.