The inventory physical count gives the company
A)inventory quantities that must be priced to arrive at the ending inventory balance reported on the balance sheet
B)inventory quantities that must be priced to arrive at the ending inventory balance reported on the income statement
C)inventory value that must be verified to the ending inventory balance reported on the balance sheet
D)inventory value that must be verified to the ending inventory balance reported on the income statement

Question

Quizplus · Accepted Answer

The physical count gives the company the actual quantity of inventory on hand, which must then be priced in order to determine the value of the ending inventory balance that will be reported on the balance sheet. It is not used to determine the ending inventory balance on the income statement, which is typically calculated using a cost flow assumption, such as first-in, first-out (FIFO) or last-in, first-out (LIFO).

The Inventory Physical Count Gives the Company