Which of the Following Statements Is True Regarding Inventory Cost

question 28

Multiple Choice

Which of the following statements is true regarding inventory cost flow methods?

• A) A company may use more than one costing method concurrently.
• B) A company must comply with the method specified by industry standards.
• C) A company must use the same method for domestic and foreign operations.
• D) A company may never change its inventory costing method once it has chosen a method.

---

Definitions:

Purchases Journal

The purchases journal is a specialized accounting ledger that tracks all purchase transactions of a business, including inventory purchases on credit.

Supplies Account

An account in the general ledger that records the amount spent on supplies that are used in the operation of a business.

General Journal

A ledger where all financial transactions of a business are initially recorded using double-entry bookkeeping.

Purchases Journal

A financial journal used to record all purchases of goods and services on credit.