For Non-Profit Entities That Are Also Merchandisers, Inventory Is Valued

question 88

Multiple Choice

For non-profit entities that are also merchandisers, inventory is valued at:

• A) lower of cost and current replacement cost.
• B) lower of cost and net realisable cost.
• C) lower of cost and estimated selling price of the inventory.
• D) net reliable cost.

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Definitions:

Capital Leases Payable

The liability account that records the present value of future lease payments for assets obtained through capital leases.

Unearned Revenues

Money received by a company for goods or services yet to be delivered or performed.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health of the business.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the business cycle, whichever is longer.