In which case will the journal entries relating to inventory differ based on the chosen costing method?
A)When inventory is purchased on account.
B)When inventory is purchased for cash.
C)When inventory is sold - the revenue entry will differ.
D)When inventory is sold - the inventory entry will differ.

Question

Quizplus · Accepted Answer

The journal entries relating to inventory will differ based on the chosen costing method when inventory is sold. Specifically, the entry for the cost of goods sold and the corresponding decrease in inventory will vary depending on whether a company is using the FIFO, LIFO, or weighted average method of inventory costing. The method chosen will impact the specific cost of inventory that is expensed, leading to different journal entries. Choices A and B (inventory purchased on account or for cash) would likely result in the same journal entry regardless of the costing method used, while C (the revenue entry) is not directly related to inventory costing.

In Which Case Will the Journal Entries Relating to Inventory