Which of the Following Statements Is False Regarding an Assumption

question 164

Multiple Choice

Which of the following statements is false regarding an assumption of inventory cost flow?

• A) The cost flow assumption need not correspond to the actual physical flow of goods.
• B) The assumption selected may be changed each accounting period.
• C) The FIFO assumption uses the earliest acquired prices to cost the items sold during a period.
• D) The LIFO assumption uses the earliest acquired prices to cost the items on hand at the end of an accounting period.

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