A company should use the same cost flow method from period to period.

Question

Quizplus · Accepted Answer

Using the same cost flow method from period to period ensures consistency and comparability in financial reporting. It also helps in accurately determining the cost of goods sold and inventory valuation. Changing the cost flow method can result in different financial statements and can make it difficult to compare financial data from different periods. Thus, it is recommended to use the same cost flow method from period to period.

A Company Should Use the Same Cost Flow Method from Period