The costing of inventories at standard cost for external financial statement reporting purposes is
A) not permitted.
B) preferable to reporting at actual costs.
C) in accordance with generally accepted accounting principles if significant differences exist between actual and standard costs.
D) in accordance with generally accepted accounting principles if significant differences do not exist between actual and standard costs.

Question

Quizplus · Accepted Answer

Standard costing is permissible under generally accepted accounting principles (GAAP) for external financial reporting as long as the standard costs closely approximate actual costs, meaning significant differences do not exist between the two.

The Costing of Inventories at Standard Cost for External Financial