Selection of an inventory cost formula by management should be influenced most by the
A) fiscal year end.
B) physical flow of goods.
C) goal of reporting inventory at its lowest cost.
D) income tax effects.

Question

Quizplus · Accepted Answer

The selection of an inventory cost formula should be influenced most by the physical flow of goods to ensure that the cost flow assumption aligns with the actual movement of inventory.

Selection of an Inventory Cost Formula by Management Should Be