Exact inventory amounts are not necessary for accounting purposes because an error in inventory will "wash out" over a two-year period.

Question

Quizplus · Accepted Answer

Exact inventory amounts are necessary for accounting purposes as they are crucial in determining cost of goods sold and gross profit. Errors in inventory can also have immediate impacts on financial statements and should be corrected as soon as possible. Waiting for two years for an error to "wash out" is not a recommended practice in accounting.

Exact Inventory Amounts Are Not Necessary for Accounting Purposes Because