Inventory is another asset for which there is a variety of ways to account under historical cost

Question:

Inventory is another asset for which there is a variety of ways to account under historical cost accounting, including first- in, first- out; last- in, first- out; average cost; etc.

Required
a. How would inventory manufactured but not yet sold be accounted for under ideal conditions? In your answer, consider both and revenue recognition approaches.
b. Give reasons why inventory is usually accounted for on a historical cost basis. Is accounting on this basis completely reliable? Why? Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...