A company must use the inventory cost flow assumption that most closely resembles the actual physical flow of goods.

Name: A company must use the inventory cost flow assumption that most closely resembles the actual physical flow of goods.
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Question

Quizplus · Accepted Answer

Companies can choose any inventory cost flow assumption (such as FIFO, LIFO, or average cost) for financial reporting purposes, regardless of the actual physical flow of goods, as long as they consistently apply the chosen method.

A Company Must Use the Inventory Cost Flow Assumption That