Management must include which of the following considerations when accounting for inventory:

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Management must consider all of these factors when accounting for inventory. The costing method affects how the cost of inventory is assigned and impacts profitability calculations. The inventory system determines how inventory is tracked, and can impact issues like stockouts and overstocking. Determining which items are included in inventory, and how their cost is calculated, is critical to accurate inventory valuation on the balance sheet. Finally, the use of lower of cost and net realizable value is an important consideration for inventory, as it ensures that inventory is not carried on the books at a value greater than it can actually be sold for.

Management Must Include Which of the Following Considerations When Accounting