Approximating the physical flow of inventory is not important when selecting an inventory cost formula.

Question

Quizplus · Accepted Answer

Approximating the physical flow of inventory is important when selecting an inventory cost formula because it helps ensure that the cost of goods sold (COGS) and inventory valuation on the balance sheet closely reflect the actual costs and physical flow of goods, leading to more accurate financial reporting and decision-making.

Approximating the Physical Flow of Inventory Is Not Important When