Which Statement Is Correct About Using a Cost Flow Assumption

question 77

Multiple Choice

Which statement is correct about using a cost flow assumption?

• A)This is an assumption about the flow of goods through the various departments in an organization.
• B)This is an assumption about the flow of costs between the income statement and the balance sheet.
• C)There is only one acceptable cost flow assumption under GAAP in Canada.
• D)Specific identification and LIFO are both acceptable cost flow assumptions in Canada.

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Definitions:

General Merchandise Retailer

Businesses that sell a wide range of products across different categories, typically in large department stores or through online platforms.

Specific Segments

Refers to the precise subdivisions of a market targeted by businesses, identified by unique characteristics like demographics, interests, or buying behavior.

Traditional Retail Outlets

Physical stores that sell products directly to customers in a face-to-face environment, as opposed to online or digital channels.

Channel Focus

A business approach that emphasizes optimizing and prioritizing marketing and distribution through specific channels to reach the target audience effectively.