At the End of the Year a Firm Sells an Item

question 10

Multiple Choice

At the end of the year a firm sells an item of inventory for €180.The item was bought for €120 at the start of the year & replacement cost is €150.General inflation has been 5%.What is the real financial capital maintenance adjustment?

• A)€0
• B)€6
• C)€24
• D)€30

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Definitions:

Taxes

Compulsory financial charges or levies imposed by a government on individuals, corporations, transactions, or property to fund public expenditures.

Taxing Entities

Taxing entities are government bodies or jurisdictions with the authority to impose taxes on individuals, property, income, or transactions within their domain.

Inputs

Resources used in the production process, including raw materials, labor, and capital.

Outputs

The products, services, or results generated from an organization's processes, systems, or activities.