Asked by Abbee Darsey on May 14, 2024
Verified
The choice of an inventory costing method has no significant impact on the financial statements.
Inventory Costing Method
An accounting approach used to value inventory, determining the cost of goods sold and ending inventory balances; common methods include LIFO, FIFO, and weighted average cost.
Financial Statements
Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and statement of cash flows.
- Appreciate the impact of inventory costing technique selection on financial reporting.
Verified Answer
NM
Nguyen Minh Nhat _ K14 FUG CTMay 16, 2024
Final Answer :
False
Explanation :
The choice of inventory costing method (FIFO, LIFO, weighted average) has a significant impact on the values reported on the financial statements. Different methods can result in different amounts for cost of goods sold, gross profit, inventory valuation, and income tax expenses.
Learning Objectives
- Appreciate the impact of inventory costing technique selection on financial reporting.
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