Question

Both U.S. GAAP and IFRS exclude which of the following from the cost of inventory?

a. Most storage costs.
b. General administrative costs.
c. Selling costs.
d. All of these are excluded by U.S. GAAP and IFRS.

Answer 1

Both U.S. GAAP and IFRS exclude storage costs, general administrative costs, and selling costs from the cost of inventory.

Step-by-step explanation:

The correct answer is d. All of these are excluded by U.S. GAAP and IFRS.

In both U.S. GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards), storage costs, general administrative costs, and selling costs are excluded from the cost of inventory. This means that these costs are not included in the calculations when determining the value of inventory.

For example, let's say a company incurs storage costs for holding inventory in a warehouse. These costs would not be included in the cost of inventory on the company's financial statements.