An example of an inventory accounting policy that should be disclosed in a Summary of Significant Accounting Policies is the
A)composition of inventory into raw materials, work-in-process, and finished goods.
B)major backlogs of inventory orders.
C)method used for pricing inventory.
D)All of these answer choices should be disclosed.

Question

Quizplus · Accepted Answer

The method used for pricing inventory (e.g., FIFO, LIFO, or weighted average) is a significant accounting policy that affects the financial statements and should be disclosed in the Summary of Significant Accounting Policies.

An Example of an Inventory Accounting Policy That Should Be