Why do think continue to use in the US

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eading about cost flows and inventories. According to one author, There are several methods for accounting for the flow of costs. These include LIFO (last in, first out), FIFO (first in, first out), specific identification, and weighted-average cost. For example, the costs of raw materials might vary over time, whereby some are higher in price than others. After the goods are sold, the company must account for the cost of goods sold by removing the items from inventory to COGS. In other words, with the LIFO method, the oldest raw materials are kept or recorded in inventory longer while FIFO leaves the recently purchased materials in inventory. Companies must use the same cost flow calculations and assumptions (Kenton, 2019). Under the International accounting principles, LIFO isn't allowed due to potential distortions it may have on a company's profitability and financial statements.

Question 1: Why do you think we continue to use it in the US?

Reference no: EM132610071

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