The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is
A)called the matching principle.
B)called the consistency principle.
C)nonexistent; that is, there is no such accounting requirement.
D)called the physical flow assumption.

Question

Quizplus · Accepted Answer

There is no accounting principle that mandates the cost flow assumption to match the physical movement of goods. Cost flow assumptions like FIFO, LIFO, and weighted average are accounting methods that do not need to reflect the actual physical flow of inventory.

The Accounting Principle That Requires That the Cost Flow Assumption