Which of the Following Is Not a Guideline When Choosing

question 5

Multiple Choice

Which of the following is not a guideline when choosing between whether to use FIFO or the average cost method?

• A)Use the same cost formula for all inventories of a similar nature and use.
• B)Select the cost formula that best matches costs and revenues.
• C)Report an inventory cost on the statement of financial position that is close to the inventory's recent cost.
• D)Choose a cost formula that corresponds as closely as possible to the physical flow of goods.

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Definitions:

Natural Justice

Fundamental procedural legal principles ensuring fairness in the resolution of disputes, including the rights to a fair hearing and an unbiased decision.

Decision

A conclusion or resolution reached after consideration by an individual or authoritative body, especially in a legal context.

Fundamental Justice

A constitutional principle in Canadian law requiring fairness in legislation that affects individuals' rights.

Procedural Fairness

The requirement that legal and administrative processes are conducted in a manner that is fair and impartial to all parties involved.