Question

The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is a. the physical flow assumption. b. the expense recognition principle. c.the consistency principle. d.nonexistent; that is, there is no accounting requirement.

Answer 1

Ansywer: (D) nonexistent; that is, there is no accounting requirement.

EXPLANATION:

No principle in accounting that requires or specified that the cost flow assumption (i.e how costs are removed from a particular company's inventory and are thereby reported as the cost of commodity sold), should be parallel or conform with the physical movement of goods.