Management decisions in accounting for inventory cost include all of the following except:
A) Costing method.
B) Inventory system (perpetual or periodic).
C) Customer demand for inventory.
D) Use of market values or other estimates.
E) Items included in inventory and their costs.

Question

Quizplus · Accepted Answer

Customer demand for inventory is not a management decision in accounting for inventory cost. Instead, it is a factor that affects inventory levels and inventory turnover, which are important metrics in managing inventory. Management decisions in accounting for inventory cost involve choosing the costing method (such as FIFO or LIFO), the inventory system (perpetual or periodic), whether to use market values or other estimates to value inventory, and determining which items are included in the inventory and their respective costs.

Management Decisions in Accounting for Inventory Cost Include All of the Following