How competitors calculate inventory cost is least likely to affect comparisons between competitors if inventory makes up a:
A)large percent of assets and inventory costs are stable.
B)large percent of assets and inventory costs are not stable.
C)small percent of assets and inventory costs are not stable.
D)small percent of assets and inventory costs are stable.

Question

Quizplus · Accepted Answer

When inventory makes up a small percentage of assets and inventory costs are stable, the way competitors calculate inventory cost is least likely to affect comparisons between competitors. This is because the impact of the inventory cost calculation method on the overall financial statement is negligible.

How Competitors Calculate Inventory Cost Is Least Likely to Affect