Management must include which of the following considerations when accounting for inventory:

Question

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All of these considerations are important when accounting for inventory. The costing method (such as FIFO or LIFO) affects the valuation of inventory and therefore impacts the financial statements. The use of lower of cost and net realizable value means that inventory is valued at the lower of its cost or the amount it can be sold for, which is important for ensuring inventory is not overvalued. The inventory system (such as perpetual or periodic) affects how inventory is tracked and valued. Finally, management must determine what items should be included in inventory and at what cost, which are also important components of inventory accounting.

Management Must Include Which of the Following Considerations When Accounting