Proper costs allocation for inventory costing and cost-of-goods-sold computations are important because:
A)inventory costing is essential for proper balance sheet presentation
B)most states have laws requiring proper balance sheet presentation and recommended allocation methods
C)cost of goods sold is an important component in the determination of net income
D)Both A and C are correct.

Question

Quizplus · Accepted Answer

Proper costs allocation for inventory costing is important to ensure accurate balance sheet presentation. Cost of goods sold is a critical component in determining net income and profitability. Therefore, both A and C are correct. While there may be state laws regarding financial reporting, they are not the primary reason for proper inventory costing and cost-of-goods-sold computations.

Proper Costs Allocation for Inventory Costing and Cost-Of-Goods-Sold Computations Are