Which One of the Following Statements Regarding Changing Inventory Methods

question 84

Multiple Choice

Which one of the following statements regarding changing inventory methods is true?

• A)A change in inventory methods can be justified if the change is made to better match profits with revenue.
• B)Changing inventory methods affects consistency.
• C)One place that the reader of an annual report would be able to identify that a company changed inventory methods is the statement of stockholders' equity.
• D)Tax advantages are valid justification for changing inventory methods.

---

Definitions:

Inventory Management

The process of ordering, storing, using, and selling a company's inventory.

Inventory Value

The total cost or market value of all the goods held by a company intended for sale.

Monetary Incentive

A financial reward given to employees, customers, or other stakeholders to motivate specific behaviors or outcomes.

Cash Discount

A reduction in the amount owed by a customer if payment is made within a specified period.