Generally accepted accounting principles allow a company to:

(a) report inventory at standard cost but cost of goods sold must be reported at actual cost.

(b) report cost of goods sold at standard cost but inventory must be reported at actual cost.

(c) report inventory and cost of goods sold at standard cost as long as there are no significant differences between actual and standard cost.

(d) report inventory and cost of goods sold only at actual costs; standard costing is never permitted.

AppendixLO1