TRUE OR FALSE Generally accepted accounting principles (GAAP) requires that absorption costing be used for the costing of inventory for external reporting purposes.

What factors might impact on the management’s selection of an inventory cost flow assumption? In your answer you need to provide explanation on what factors could impact on a manager to choose FIFO, LIFO or the average cost method. In your answer you may want to refer to issues such as the impact of various cost flow assumptions on the income statement or the statement of financial position. List four factors in your answer

Explain the main obstacle to achieving convergence in the area of inventory accounting.

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