Which inventory costing system is required by GAAP for financial reporting purposes?
A)absorption costing
B)standard costing
C)direct costing
D)variable costing

Question

Quizplus · Accepted Answer

GAAP requires the use of absorption costing for financial reporting purposes. This method allocates both fixed and variable production costs to products, resulting in a higher cost of goods sold and lower net income compared to other costing methods like direct or variable costing.

Which Inventory Costing System Is Required by GAAP for Financial