Sample Multiple Choice Questions 1. DanCo values its inventory at the lower of cost or market in accordance with GAAP. On December 31, 2021, DelCo compiled the following information related to the inventory balance of Product Z, an item the company sells. Historical cost of Product Z Net realizable value of Product Z $2,200 $2,500 Which of the following would be the amount reported on DanCo's 2021 financial statements for Product A? a. $2,500 b. $2,300 c. $2,200 d. $300 2. The Sales Returns and Allowances account is classified as: a. An expense b. A contra revenue c. An asset d. A contra asset e. A liability f. A revenue 3. For which of the following intangible assets would a company usually record an amortization expense over the asset's useful life? Circle all that apply. a. Research and development costs b. Goodwill c. Patents d. Copyrights e. Trademarks