Which Inventory Cost Flow Assumption Is Allowed Under U

question 11

Multiple Choice

Which inventory cost flow assumption is allowed under U.S.GAAP but not under IFRS?

• A)Specific identification.
• B)FIFO.
• C)LIFO.
• D)Average cost.

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Definitions:

Equivalent Units

A concept in cost accounting used to allocate costs in the production process when mixing inputs and outputs, providing a way to measure work done in terms of homogeneous units.

Process Costing System

An accounting system used to apply costs to similar products that are mass-produced in a continuous fashion.

Completion

The state of being finished or brought to the end, often referring to projects, construction, or specific tasks.

Cost Object

Any item for which a separate measurement of costs is desired, such as products, services, projects, or departments.