An assumption about cost flow is necessary
A) because it is required by the income tax regulation.
B) even when there is no change in the purchase price on inventory.
C) only when the flow of goods cannot be determined.
D) because prices usually change, and tracking which units have been sold is difficult.

Question

Quizplus · Accepted Answer

An assumption about cost flow is necessary because prices usually change, and it is difficult to track which specific units have been sold, making it necessary to use methods like FIFO, LIFO, or average cost to assign costs to inventory and cost of goods sold.

An Assumption About Cost Flow Is Necessary