A company cannot use an inventory costing method if the method does not reflect the actual physical flow of goods on and off the shelves.

Question

Quizplus · Accepted Answer

A company can use an inventory costing method that does not reflect the actual physical flow of goods, as long as it is consistently applied and complies with accounting standards. Methods like FIFO, LIFO, and weighted average are often used for cost allocation rather than reflecting physical flow.

A Company Cannot Use an Inventory Costing Method If the Method