All of the following statements regarding the financial statement impact of inventory costing are true except.
A)When purchase prices are changing,the methods to assign inventory costs result in different amounts for cost of goods sold.
B)Inventory on the balance sheet approximates current cost when FIFO is used.
C)The weighted average method smooths out erratic changes in costs.
D)Selected costing method does not impact net income.
E)Cost of goods sold on the income statement approximates current cost when LIFO is used.

Question

Quizplus · Accepted Answer

Selected costing method does impact net income, as it directly affects the amount of cost of goods sold and the value of inventory on the balance sheet, both of which ultimately affect the calculation of net income. All other statements are true.

All of the Following Statements Regarding the Financial Statement Impact