Asked by Hassaan Haider on Jul 15, 2024
Verified
Selection of an inventory costing method by management does not usually depend on
A) the fiscal year end.
B) income statement effects.
C) balance sheet effects.
D) tax effects.
Inventory Costing Method
A system used to value inventory, including methods such as FIFO (First In, First Out), LIFO (Last In, First Out), and weighted average cost.
Fiscal Year End
The closing date of a 12-month accounting period upon which a company completes its annual financial reporting and determines net income.
Tax Effects
The impact of taxation on investment returns, business operations, or individual income.
- Understand the fundamentals of consistency, comparability, and the need for disclosure in the accounting of inventory.
Verified Answer
SC
Santa CastilloJul 20, 2024
Final Answer :
A
Explanation :
The selection of an inventory costing method typically depends on factors such as income statement effects, balance sheet effects, and tax effects, rather than the fiscal year end.
Learning Objectives
- Understand the fundamentals of consistency, comparability, and the need for disclosure in the accounting of inventory.