Which of the Following Is NOT an Example of a Risk

question 22

Multiple Choice

Which of the following is NOT an example of a risk of ownership of an asset?

• A) Idle capacity.
• B) Gains on the eventual sale of the asset.
• C) Uninsured damage.
• D) Technical obsolescence.

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Definitions:

FIFO

"First In, First Out," an inventory valuation method that assumes the first items placed in inventory are the first sold.

LIFO

Last In, First Out, an inventory valuation method where the latest items added to inventory are the first to be sold.

Cost of Goods Sold

Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold in a company.

Periodic Inventory System

An inventory accounting system where updates are made at intervals, such as monthly or annually, rather than continuously.