Question

A major theoretical problem in accounting for inventory is:

a.

deciding which goods are
obsolete.




b.

allocating costs between cost of
sales and stock on hand.




c.

calculating the cost of

Answer 1

Allocating costs between cost of sales and stock on hand is a major theoretical problem in accounting for inventory. This is because it is difficult to determine the exact cost of each item in inventory, especially when there are large quantities of similar items. This can make it challenging to allocate costs between cost of sales and stock on hand, which can impact a company's financial statements and profitability.