The comparison of activity measures of different companies is complicated by the fact that: Multiple Choice the number of shares of common stock issued may be significantly different. only one of the companies may have preferred stock outstanding. different inventory cost flow assumptions may be used. dollar amounts of assets may be significantly different.

Question

Business

Clarence Vincent

14 November, 13:00

The comparison of activity measures of different companies is complicated by the fact that: Multiple Choice the number of shares of common stock issued may be significantly different. only one of the companies may have preferred stock outstanding. different inventory cost flow assumptions may be used. dollar amounts of assets may be significantly different.

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Answers (1)

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Sonny Collins · Answer 1

The answer is: different inventory cost flow assumptions may be used.

Explanation:

The cost of an inventory may vary depending on the method used by the company since it changes between the time it was acquired and the time it was sold. For instance, first in - first out (FIFO), last in - first out (LIFO), are both very common methods for determining inventory costs, but they may vary significantly from one another. Other less popular methods are weighted average and specific identification, each will give us a different inventory cost.