Selection of an inventory cost formula by management does NOT usually depend on
A) the fiscal year-end.
B) income statement effects.
C) balance sheet effects.
D) tax effects.

Question

Quizplus · Accepted Answer

The selection of an inventory cost formula by management typically depends on factors such as income statement effects, balance sheet effects, and tax effects, but not on the fiscal year-end. The fiscal year-end is a date that marks the end of a company's accounting period, but it does not influence the choice of inventory costing method (e.g., FIFO, LIFO, or average cost).

Selection of an Inventory Cost Formula by Management Does NOT