A major theoretical problem in accounting for inventory is:
A) calculating the cost of purchases.
B) allocating costs between cost of sales and stock on hand.
C) counting the stock.
D) deciding which goods are obsolete.

Question

Quizplus · Accepted Answer

Allocating costs between cost of sales and stock on hand is a major theoretical problem in accounting for inventory as it requires an accurate determination of the cost of goods sold (COGS) and the value of inventory on hand. This can be complicated by various factors such as the use of different inventory valuation methods and the need to account for obsolete or slow-moving inventory. Calculating the cost of purchases, counting the stock, and deciding which goods are obsolete are all important tasks in inventory management, but they do not necessarily represent major theoretical problems.

A Major Theoretical Problem in Accounting for Inventory Is