Which statement is correct about the various cost allocation methods available in GAAP?
A)FIFO is used in the initial recognition and measurement of inventory.
B)LIFO is used to measure the ending inventory balance on the balance sheet.
C)Weighted average is not an acceptable allocation method for the income statement.
D)Moving weighted average is the perpetual weighted average cost method.

Question

Quizplus · Accepted Answer

The moving weighted average is a method used in perpetual inventory systems where the average cost of inventory is recalculated after each purchase, making it a perpetual weighted average cost method.

Which Statement Is Correct About the Various Cost Allocation Methods