Which of the following statements is true regarding inventory cost flow assumptions?
A) A company may use more than one costing method concurrently.
B) A company must comply with the method specified by industry standards.
C) A company must use the same method for domestic and foreign operations.
D) A company may never change its inventory costing method once it has chosen a method.

Question

Quizplus · Accepted Answer

A company can use more than one costing method concurrently for different products or different inventory accounts. The choice of costing method is usually based on management's judgment and is not dictated by industry standards or regulations. Additionally, while it is generally advisable for a company to stick with a consistent costing method, it may change its method if it can justify the change and properly disclose the change in financial statements.

Which of the Following Statements Is True Regarding Inventory Cost