A major disadvantage to the cost method of accounting is that ________.

Question

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The major disadvantage to the cost method of accounting is that costs must be assigned to each item in stock and to each item sold, requiring detailed record-keeping and increased labor costs. Markdowns, markups, and employee discounts still need to be accounted for, but this applies to most methods of accounting. The cost of goods sold is based on the actual cost of the items, not delivery costs, but this is not necessarily a disadvantage. The cost complement may not accurately reflect true costs, but this is more of a limitation than a disadvantage.

A Major Disadvantage to the Cost Method of Accounting Is