Which of the Following Is True Regarding Accounting for Inventories

question 101

Multiple Choice

Which of the following is true regarding accounting for inventories?

• A) GAAP permits use of either the consumption method or the purchases method
• B) If inventories are significant, GAAP requires that an asset account be credited in order to record a fund balance reserve
• C) Under the consumption method, Expenditures are debited when inventory is received
• D) All of the above are true

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