Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

Question

Quizplus · Accepted Answer

Management can choose any inventory costing method (e.g., FIFO, LIFO, average cost) for financial reporting purposes, but the choice does not need to match the physical movement of goods. The decision is often based on financial, tax, or operational considerations.

Management May Choose Any Inventory Costing Method It Desires as Long