When a physical inventory is conducted in the cost method of accounting,_____.

Question

Quizplus · Accepted Answer

When a physical inventory is conducted in the cost method of accounting, the costs of each item must be ascertained. This is because the cost method values inventory at its historical cost and requires the cost of each item to be known in order to calculate the total cost of inventory on hand. Additional markups, deductions from retail value, and cost complements are not typically necessary in the cost method of accounting.

When a Physical Inventory Is Conducted in the Cost Method