If companies have identical inventoriable costs but use different inventory flow assumptions when the price of goods have not been constant then the
A) cost of goods sold of the companies will be identical.
B) cost of goods available for sale of the companies will be identical.
C) ending inventory of the companies will be identical.
D) net income of the companies will be identical.

Question

Quizplus · Accepted Answer

The cost of goods available for sale will be identical for companies with identical inventoriable costs, regardless of the inventory flow assumption used. This is because the cost of goods available for sale is determined before any inventory flow assumption impacts the allocation of costs between ending inventory and cost of goods sold.

If Companies Have Identical Inventoriable Costs but Use Different Inventory