Question

The areas wherein different accounting policies can be adopted are _______________.

• A. Providing depreciation
• B. Valuation of inventories
• C. Valuation of investments
• D. All of the above

Answer 1

The correct option is D All of the above

These depreciation methods are selected, based on the value, usefulness, productivity, and life expectancy. The four common methods of depreciation include Straight-line, WDV, annuity method, Sum of years digits method.

Inventory valuation. Inventory valuation is the cost associated with an entity's inventory at the end of a reporting period. It forms a key part of the cost of goods sold calculation, and can also be used as collateral for loans. You are not allowed to add any administrative or selling costs to the cost of inventory.

Valuations can be done on assets (for example, investments in marketable securities such as stocks, options, business enterprises, or intangible assets such as patents and trademarks) or on liabilities (e.g., bonds issued by a company).