Accounting - Study Mode
[#1641] Cost of goods available for sale - closing inventory = ?
Correct Answer
(D) Cost of goods sold
Explanation
Solution: Cost of goods available for sale - closing inventory = Cost of goods sold.
[#1642] NRV or net realizable value of inventory is the expected selling price or market value less
Correct Answer
(B) Expenses necessary to complete sale
Explanation
Solution: NRV or net realizable value of inventory is the expected selling price or market value less Expenses necessary to complete sale. Net realizable value is generally equal to the selling price of the inventory goods less the selling costs (completion and disposal).
[#1643] Under which method of inventory costing, a pre-determined cost is assigned to all items of inventory?
Correct Answer
(B) Standard cost method
Explanation
Solution: Under Standard cost method of inventory costing, a pre-determined cost is assigned to all items of inventory. A standard cost is described as a predetermined cost, an estimated future cost, an expected cost, a budgeted unit cost, a forecast cost, or as the "should be" cost. Standard costs are often an integral part of a manufacturer's annual profit plan and operating budgets.
[#1644] Term 'Credit' means _____ by the business
Correct Answer
(A) Receiving of benefits
Explanation
Solution: Term 'Credit' means Receiving of benefits by the business. The terms which indicate when payment is due for sales made on account (or credit).
[#1645] When a liability is reduced or decreased, it is recorded on the:
Correct Answer
(D) Left or debit side of the account
Explanation
Solution: When a liability is reduced or decreased, it is recorded on the Left or debit side of the account.