An example of an inventory accounting policy that should be disclosed is the
A) effect of inventory profits caused by inflation.
B) classification of inventory into raw materials,work in process,and finished goods.
C) identification of major suppliers.
D) method used for inventory costing.

Question

Quizplus · Accepted Answer

Disclosing the method used for inventory costing is important because it affects the reported value of inventory and can have a significant impact on the financial statements. This information is important for users of financial statements to know and understand when analyzing a company's financial performance. Options A, B, and C are not accounting policies that need to be disclosed.

An Example of an Inventory Accounting Policy That Should Be