Which inventory cost flow assumption is not allowed for financial reporting in many foreign countries?
A)specific identification
B)average
C)FIFO
D)LIFO

Question

Quizplus · Accepted Answer

LIFO (last-in, first-out) is not allowed for financial reporting in many foreign countries, including under International Financial Reporting Standards (IFRS). This is because it does not match the physical flow of goods in many cases and can result in lower reported profits and tax liabilities. Therefore, companies operating in these countries must use other inventory cost flow assumptions such as specific identification, average, or FIFO (first-in, first-out).

Which Inventory Cost Flow Assumption Is Not Allowed for Financial