The inventory method a company uses does not affect its income statement.

Question

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The inventory method a company uses can affect its income statement, specifically the cost of goods sold and gross profit. The two main inventory methods are FIFO (first-in, first-out) and LIFO (last-in, first-out). The choice of inventory method affects the cost of goods sold, which in turn affects gross profit, operating income, and net income. In addition, there are other inventory costing methods such as weighted-average and specific identification that can also impact the income statement.

The Inventory Method a Company Uses Does Not Affect Its