Which Statement Is Correct About the Various Cost Allocation Methods

question 137

Multiple Choice

Which statement is correct about the various cost allocation methods available in GAAP?

• A)FIFO is used in the initial recognition and measurement of inventory.
• B)LIFO is used to measure the ending inventory balance on the balance sheet.
• C)Weighted average is not an acceptable allocation method for the income statement.
• D)Moving weighted average is the perpetual weighted average cost method.

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Definitions:

Reference Group

A reference group is composed of people against whom an individual evaluates his or her situation or conduct.

Evaluative Group

A group used as a reference point for assessing or making judgments about something or someone.

Formal Organizations

Secondary groups designed to achieve explicit objectives.

Secondary Groups

Social groups characterized by impersonal, formal, and instrumental relationships, often focused on a specific goal or task.