GAAP requires the use of _______ costing for accumulating all direct and allocated costs to inventory units.
A) job order
B) absorption
C) backflush
D) fair value

Question

Quizplus · Accepted Answer

GAAP requires the use of absorption costing for accumulating all direct and allocated costs to inventory units. This includes direct materials, direct labor, and overhead costs. Job order costing is used to allocate costs to individual jobs or products, while backflush costing is a method of inventory valuation that is based on the number of units produced rather than the actual cost of production. Fair value accounting is used to measure certain assets and liabilities at their current market value.

GAAP Requires the Use of _______ Costing for Accumulating All