A company may use more than one inventory costing method concurrently.

Question

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A company may use different inventory costing methods for different types of inventory or for different purposes (such as for financial reporting and tax purposes). For example, a company may use the first-in, first-out (FIFO) method to calculate its cost of goods sold for financial reporting, but use the last-in, first-out (LIFO) method for tax purposes to minimize its tax liability.

A Company May Use More Than One Inventory Costing Method