Question

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Answer 1

1. The balance sheet valuation of inventories is?

Answer: Option C : Lower of Cost or Market Value.

Reason: As per the standards the inventories should be valued at cost or market value whichever lower.

2. The allowance for uncollectible accounts is an?

Answer: Option C : Expense Account

Reason: The uncollectible allowance account which means there is a risk that the debtor of the entity may not be able to pay the money we need to receive which will be charged to the profit and loss account. So, it will be an expense account.

3.             are potential cliams on a company resources arising from pending litigations, environmental hazards, casuality losses to property and product warranties?

Answer: Option C : Non - Contingent Liabilities

Reason: Non - Contingent Liabilities are those which are potential liability that may occur depending on the outcome of an unknown future event. Once if the contingency becomes probable and the amount liability can be reasonably estimated, it is recorded in the accounting records.