When Valuing Inventory for a Business Sale, the Most Common

question 4

Multiple Choice

When valuing inventory for a business sale, the most common methods used are:

• A) first-in-first-out (FIFO) and last-in-first-out (LIFO).
• B) first-in-first-out (FIFO) and average costing.
• C) cost of last purchase and replacement value of inventory.
• D) cost of last purchase and average costing.

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Definitions:

Earnings Per Share

The portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of a company's profitability.

Corporate Income Statement

is a financial document that outlines a corporation’s revenues, expenses, and profits or losses over a specific period.

Income From Continuing Operations

The earnings generated from a company's ongoing core business operations, excluding extraordinary items.

Cumulative Effect

The aggregate impact of an accounting change or policy adjustment over the period before the adjustment is implemented, often recognized immediately in financial statements.