a. Income manipulation is difficult under LIFO. b. Accounting principles do not require that the inventory cost flow approximate the physical flow of goods. c. Companies may use LIFO for tax purposes and FIFO in the financial statements. d. In periods of declining prices, LIFO will result in the

Q: Which of the following statements about the use of the FIFO assumption is NOT true?   a.   The…

A: Solution: "The FIFO assumption produces inventory asset values that are based on older purchase…

Q: Classify each of the following accepted accounting practices as conservative or aggressive.1. Use…

A: Conservative Accounting– Conservative accounting practice means use of the technique for…

Q: Current Attempt in Progress If a company overstates its closing inventory, it will O understate…

A: When closing inventory is overstated, this reduces the amount of inventory that would otherwise have…

Q: Generally accepted accounting principles require that the inventory of a company be reported at:…

A: The inventory can be reported at various values as historical cost, market value, net realisable…

Q: Identify the correct statement from the following if, cost of inventory is greater than its net…

A: Net realizable value seems to be an essential indicator being used in accounting reporting for…

Q: Which one of the following inventories may not be valued for balance sheet purposes at the…

A: Inventory is valued only at lower of Cost or Net realizable value(which is the selling price minus…

Q: Which of the following is not permitted as a cost of inventory?

A: Which of the following is not permitted as a cost of inventory? Answer - b) Storage costs

Q: During times of inflation, which of these inventory accounting methods is best for cash flow? JUST…

A: given information   need to find the incorrect statement in the below-given options given in the…

Q: Which of the following is not a disadvantage of the LIFO inventory cost flow assumption? a. The…

A: LIFO is the Last in first out method of inventory which says that inventory purchased last should be…

Q: The Rider Company uses the gross profit method to estimate ending inventory and cost of goods sold.…

A: In order to accurately estimate the ending inventory under the gross profit method, the cost…

Q: Which of the following statements is incorrect? Group of answer choices A)Ending inventory exceeds…

A: a) Cost of goods sold= Opening inventory + Purchases - Ending inventory Lets take a example…

Q: In calculating inventory turnover, why is cost of goods sold used as the numerator? As the inventory…

A: Inventory turnover ratio:Inventory turnover ratio is used to determine the number of times inventory…

Q: Which one of the following is not a disadvantage of the specific identification method of inventory…

A: Under specific identification methods of inventory, specific inventory movement is measured. So it…

Q: The cost of purchase of inventory does not include: A. Freight handling and other cost directly…

A: Note: Since you have asked multiple questions, we will solve the first question for you. If you want…

Q: Which method of inventory valuation is not allowed when calculating profit for tax purposes? Select…

A: The inventory can be valued using various methods as LIFO, FIFO , weighted average method.

Q: What does it mean when a company has a major expense? Like for example, "The major expense for…

A: For your understanding -  There are two types of cost direct costs and indirect costs. Direct costs…

Q: Which inventory valuation model serves as a middle-of-the-road approach for taxes and income? a.…

A: Under the FIFO and LIFO, the obtained cost of goods sold can be higher or lower than the actual…

Q: Gross income derived from business shall be equivalent to gross sales less sales returns, discount…

A: Sales return: when the sold item being returned by the customer to the seller. It is known as sales…

Q: Which of the following is an example of a conservative accounting practice? a. Estimate the…

A: Introduction:   Conservative accounting practices refers to the accounting practices which tend to…

Q: The major criticism of the lower of cost or market rule for valuation of inventory is that

A:

Q: Do you agree with the following statements? Express your opinion on each statement.

A: 1: This statement is correct  This can be explained with the help of example: Suppose closing stock…

Q: Which of the following statements is incorrect? Select one: a. By using the IFRS, goods shipped on…

A: Option C is correct.

Q: The gross profit method and retail inventory method C Are both estimates of ending inventory and…

A: In company, there is a requirement of valuation of the inventory to find out the cost of the goods…

Q: Do you agree with the following statements? Express your opinion on each statement. An inventory…

A: 1) This statement is correct  This can be explain with the help of example: Suppose closing stock is…

Q: What is the effect on net income if a company fails to record a purchase in transit (FOB shipping…

A: Accounting for inventory Inventory is all type of goods and products held by the seller to sell in…

Q: Explain the purpose of the inventory turnover ratio? Is it possible for a firm to have a high…

A: In finance we make use of various financial ratios to determine the financial health of a company.…

Q: Which of the following may not result to the amount of cost of sales? a.Net purchases less net…

A: Solution- COGS can be calculated in three steps that culminate in one formula.   Or, to put it…

Q: Which of the following statement is FALSE for Merchandise inventory of the Business? a. It is a…

A: Merchandise inventory is classified as a current asset on the balance sheet. Assets normally have a…

Q: During a period when inventory costs are steadily increasing, which of the following is true? O a.…

A: FIFO considers the cost of initial purchases as the cost of goods sold and the later purchases as…

Q: Which of the following items in the balance sheet does NOT have a constant relationship with sales…

A: In the percentage of sales method, we forecast line items for the future by using the historical %…

Q: Inventory Costing Method.

A: Methods of issuing the Material from store: THE Material purchased at first entered into the store…

Q: he management of Milque Corp. is considering the effects of various inventory-costing methods on its…

A: Introduction:- The following four inventory valuation methods used as follows under:- First-In,…

Q: Which of the following statements is true with regard to the gross profit ratio? An increase in…

A: Gross profit is an excess amount of revenue over its cost of goods sold.it measures profitability…

Q: When a company uses LIFO for external reporting purposes FIFO for internal reporting pusposes, an…

A: LIFO reserve: LIFO reserve refers to the difference in the value of inventory, between the goods…

Q: Why does reporting income under generally accepted accounting principles “reward building inventory…

A: Generally Accepted Accounting Principles: The Generally Accepted Accounting Principles are a group…

Q: When a company determines that the net realizable value of its ending inventory is lower than its…

A: Lower of cost and net realizable value: The lower of cost and net realizable value is a method which…

Q: A firm that uses LIFO accounting for inventory in times of rising investory costs will always report…

A: FIFO First in first out method is a method of inventory accounting wherein the units of goods…

Q: The retail inventory method requires a company to value its inventory on the balance sheet at retail…

A: The retail inventory method is an accounting process wherein the estimated or approximate value of…

Q: You have been asked by the financial vice president to develop a short presentation on the LCNRV…

A: a. As per GAAP, the inventory is to be valued at the lower of its cost i.e. the laid down cost or…

Q: Which of the following statements about the use of the FIFO assumption is NOT true? a.The FIFO…

A: In FIFO method  the opening  and earliest goods will be sold first.

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.