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Expense Side of Statement of Profit and Loss

The following...

Question

The following cost basis should be used to value inventory for external financial reporting.

A

Historical cost

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B

Standard cost

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C

Normal cost

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D

Applied cost

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Solution

The correct option is A Historical cost
A historical cost is a measure of value used in accounting in which the value of an asset on the balance sheet is recorded at its original cost when acquired by the company.

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