Which of the Following Is Generally Not True About Inventory

question 1

Multiple Choice

Which of the following is generally not true about inventory?

• A)Inventory consists of all goods owned and held for sale to customers.
• B)Inventory is a non-financial asset.
• C)Inventory must be managed on a unit-by-unit (i.e. ,specific identification)method.
• D)Inventory is usually shown on the balance sheet at cost.

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Definitions:

Withdrawals Account

An account used to record the amounts withdrawn by the owner from the business for personal use.

Income Summary

An account used during the closing process that summarizes the revenues and expenses of an accounting period to calculate the net income or loss.

Temporary Account

A temporary account is an account that is closed at the end of each accounting period, with its balance transferred to a permanent account.

Real Accounts

Accounts related to assets, liabilities, and equity that are not closed at the end of the accounting period.