Which of the following methods for determining inventory cost is not allowed by GAAP?
A)Average cost.
B)FIFO.
C)LIFO.
D)Standard cost.

Question

Quizplus · Accepted Answer

GAAP does not allow the use of standard cost for determining inventory cost. Standard cost is a management accounting tool used for planning and control purposes, but it is not an acceptable method for financial reporting under GAAP. Average cost, FIFO and LIFO are all acceptable methods for determining inventory cost under GAAP.

Which of the Following Methods for Determining Inventory Cost Is