If Companies Have Identical Inventoriable Costs but Use Different Inventory

question 95

Multiple Choice

If companies have identical inventoriable costs but use different inventory flow assumptions when the price of goods have not been constant, then the

• A)cost of goods sold of the companies will be identical.
• B)cost of goods purchased during the year will be identical.
• C)ending inventory of the companies will be identical.
• D)net income of the companies will be identical.

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Definitions:

Functional Costs

Expenses directly associated with the operational activities of a business, such as production, marketing, and distribution.

Functional Revenues

Functional revenues refer to the income generated from the primary activities of a business or organization, directly related to its core operations.

Operational Obstacles

Challenges or barriers that occur during the day-to-day operations of a business, affecting its efficiency and effectiveness.

Incentive Obstacles

These are barriers or challenges to motivating individuals or organizations to achieve desired behaviors or outcomes.