Which of the following cost flow assumptions would be most appropriate for costing an inventory of liquids stored in tanks?
A)Moving average
B)FIFO
C)Periodic
D)Perpetual

Question

Quizplus · Accepted Answer

The moving average cost method is most appropriate for costing an inventory of liquids stored in tanks because it smooths out price fluctuations over time by averaging the costs, which is suitable for commodities like liquids that are indistinguishable from each other and are often added to and drawn from in a manner that does not easily allow for tracking the specific cost of the individual units sold.

Which of the Following Cost Flow Assumptions Would Be Most