- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 6. Analysis of Inventories
- Subject 1. Inventory Valuation
CFA Practice Question
Different inventory accounting methods allocate costs between ______ and ______.
II. purchase price
III. beginning balance
IV. ending balance
I. COGS
II. purchase price
III. beginning balance
IV. ending balance
Correct Answer: I and IV
The cost of goods available for sale (beginning inventory + purchases) is the same for all inventory methods.
User Contributed Comments 5
| User | Comment |
|---|---|
| Bududeen | i disagree...if they allocate different costs to ending balance, then beginning balance by deduction is also different...because ending balance for this period becomes beginning balance for the next period |
| vatsal92 | You're technically right Bududeen, but you're suppose to tackle this question from a micro perspective. |
| choas69 | chill.... you cant just disagree with CFA man. |
| ashish100 | "i disagree" lmao |
| zhefuli | Recall Q1: "At year-end, all COG available for sale either become COGS or ending inventory." |