An assumption about cost flow is used
A)because it is required by the income tax regulation.
B)even when there is no change in the purchase price of inventory.
C)only when the flow of goods cannot be determined.
D)because prices usually change, and tracking which units have been sold is difficult.

Question

Quizplus · Accepted Answer

An assumption about cost flow is used because prices usually change, and it is difficult to track which specific inventory units have been sold, making it necessary to use methods like FIFO, LIFO, or average cost to estimate cost of goods sold and ending inventory.

An Assumption About Cost Flow Is Used