Which of the following inventory costing methods is often adopted when a company prefers a "middle of the road" approach, receiving moderate income tax benefits while retaining some financial statement benefits?

Question

Quizplus · Accepted Answer

The average cost method smooths out price fluctuations over time, which can be seen as a "middle of the road" approach. It doesn't maximize tax benefits like LIFO nor does it maximize reported profits like FIFO, but it offers a balance between the two, providing moderate benefits in both areas.

Which of the Following Inventory Costing Methods Is Often Adopted