An example of an inventory accounting policy that should be disclosed in a Summary of Significant Accounting Policies is the
A) amount of income resulting from the involuntary liquidation of LIFO.
B) major backlogs of inventory orders.
C) method used for pricing inventory.
D) composition of inventory into raw materials, work-in-process, and finished goods.

Question

Quizplus · Accepted Answer

The policy for pricing inventory is a significant accounting policy that affects the valuation of inventory and the calculation of cost of goods sold. The other options do not pertain to an inventory accounting policy.

An Example of an Inventory Accounting Policy That Should Be