Which statement is correct about using a cost flow assumption?
A)This is an assumption about the flow of goods through the various departments in an organization.
B)This is an assumption about the flow of costs between the income statement and the balance sheet.
C)There is only one acceptable cost flow assumption under GAAP in Canada.
D)Specific identification and LIFO are both acceptable cost flow assumptions in Canada.

Question

Quizplus · Accepted Answer

A cost flow assumption is about how costs are allocated between the income statement and the balance sheet, not the physical flow of goods.

Which Statement Is Correct About Using a Cost Flow Assumption