Which of the following statements is incorrect?
A)A year-end purchase of inventory increases the LIFO cost of goods sold when unit costs are increasing.
B)A year-end purchase of inventory increases the FIFO ending inventory when unit costs are increasing.
C)The choice of an inventory costing method is dependent on the actual flow of goods when inventory is sold.
D)A year-end purchase of inventory has an impact on the weighted-average ending inventory when unit costs are increasing.

Question

Quizplus · Accepted Answer

The choice of an inventory costing method (such as LIFO, FIFO, or weighted average) is not dependent on the actual physical flow of goods. Companies can choose any method that best matches their financial reporting objectives, regardless of how inventory physically moves through their system.

Which of the Following Statements Is Incorrect