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selling price, with disposal costs of $3.00 and normal profit of $12.00.
Which of the following statements is not true?
a. The cost of sales of the following year will be understated.
b. The current year's income is understated.
c. The closing inventory of the current year is understated.
d. Income of the following year will be understated.
S28. When the cost-of-goods-sold method is used to record
inventory at market
a. there is a direct reduction in the selling price of the product that
results in a loss being recorded on the income statement prior to the
sale.
b. a loss is recorded directly in the inventory account by crediting
inventory and debiting loss on inventory decline.
c. only the portion of the loss attributable to inventory sold during
the period is recorded in the financial statements.
d. the market value figure for ending inventory is substituted for cost
and the loss is buried in cost of goods sold.
29. Lower-of-cost-or-market as it applies to inventory is best
described as the
a. drop of future utility below its original cost.
b. method of determining cost of goods sold.
c. assumption to determine inventory flow.