Which of the following statements best describes how management selects an inventory valuation method?
A)If a company generally sells its oldest inventory first,it must use the FIFO inventory valuation method.
B)If a company generally sells its oldest inventory first,it must use the LIFO inventory valuation method.
C)If a company generally sells its newest inventory first,it must use the FIFO inventory valuation method.
D)If a company sometimes sells its newest inventory and sometimes sells its oldest inventory,then it must use the weighted average inventory valuation method.
E)A company may choose any inventory valuation method even if it is contradictory to the physical flow of inventory.

Question

Quizplus · Accepted Answer

Management has the discretion to select any inventory valuation method, regardless of the physical flow of inventory. While the choice may be influenced by accounting rules and tax considerations, ultimately, management must use its judgment to select the most appropriate method for its operations.

Which of the Following Statements Best Describes How Management Selects