amount of cost of sales?

Q: When there are no inventory at the beginning or at the end of the period, the total purchases will…

A: The total purchase amount is the price agreed upon by the buyer and seller for an item, including…

Q: Using the lower of cost or market, what should the total inventory value be for the following items:…

A: Item A cost=Quantity×Cost per unit=186×$6=$1,116

Q: If ending inventory is understaffed for year 1, then in year 2…. A. Costa of goods sold and gross…

A: Inventory is the term used in accounting which refers to the goods as well as materials that the…

Q: A company records inventory at gross invoice price. Theoretically, how should the following affect…

A: Solution: Interest on inventory loan do not affect cost of inventory, it is working capital loan…

Q: 5. If a unit of inventory has declined in value below original cost, but the market value exceeds…

A: The procedure of determining the actual value of inventories at the end of the year is known as…

Q: (True or False) Cost of sales, under the periodic system, is calculated as inventory at start (plus…

A: Periodic Inventory System - Under periodic inventory system cost of goods sold will be calculated at…

Q: 2 Calculate ending inventory using the lower of cost and net realizable value.

A: The Inventory is  recorded at cost or NRV in the financial position so that inventory is valued…

Q: Which of the following statements is correct in the context of the Income Statement prepared by a…

A: The Income Statement is prepared in order to show the result of operating a business for a period of…

Q: According to the expense recognition principle, inventory costs are expensed as cost of goods sold…

A: True

Q: Total goods available for sale is equal to  a. the sum of ending inventory and net purchases. b.…

A: Beginning inventory + Net purchases = Cost of goods sold + Ending inventory Total cost of goods…

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: Under the lower of cost or market inventory valuation rule, market value of inventory is defined as:…

A: Market value is the price of an item/product prevailing in the market on the given date.

Q: If the dollar amount in ending accounts payable is greater than the dollar amount in beginning…

A: Solution- Accounts payable are amounts due to vendors or suppliers for goods or services received…

Q: Which of the following statements is incorrect?

A: Cost of Goods Sold: Cost of Goods sold is the Cost of the items that are sold it is calculated for…

Q: Which income statement account(s) would be affected by a policy choice at the same time as the…

A: Inventory is directly related to the cost of goods sold. To change the policy of valuation of…

Q: Required: 1. What is the estimated fire loss if OOO Company applies the conservative retail…

A: Retail inventory method  refers to the method used by retailers who resell products in order to…

Q: gross profit method assumes

A: The gross profit technique calculates the value of inventory by combining current period data on net…

Q: 11. What is the effect on cost of goods sold, gross profit, and net income if ending mer- chandise…

A: Error in inventory recording can be cancelled or we can say nullified within two consecutive…

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: Gross profit is calculated as the difference between net sales revenue and​ ________.         A.…

A: Revenue- Revenue refers to the quantity of cash that a corporation actually received during the…

Q: Which of the following is the same as 'net realisable value' of inventory?   a. proceeds of sale…

A: The question is multiple choice question  Required  Choose the Correct Option.

Q: In a peiod of rising prices, which method would yield the lowest ending inventory, highest net…

A: The inventory valuation method used to evaluate the closing inventory and cost of goods sold on the…

Q: Cost of goods sold equals to a) ® Cost of goods available for sale - ending inventory. b) © Sales +…

A: COST OF GOODS SOLD REFERS TO THE DIRECT COSTS OF PRODUCING THE GOODS SOLD BY A COMPANY .

Q: 4. Using the FIFO method, the most recent purchases of inventory are assumed to be contained: a. on…

A: Under FIFO method, units purchased earlier are assumed to be sold first and the ending inventory…

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: 1) If the ending inventory is to be valued at approximately lower-of-cost-or-net realizable value,…

A: Cost to retail ratio may be defined as the division of cost of goods available for sale and retail…

Q: When there are no inventory at the beginning or at the end of the period, the total purchases will…

A: Cost of sales means actual cost of goods that is being sold to the customers. It includes beginning…

Q: If merchandise inventory is being valued at cost and the price level is decreasing, which of the…

A: Inventory cost is calculated by LIFO, FIFO and average cost method. Under LIFO method, inventory…

Q: An increase in the inventory turnover rate is indicative of: Multiple Choice a decrease in the cost…

A: Inventory turnover rate is calculated as ratio of cost of goods sold and inventory

Q: 55. Why is inventory, end is included in the computation of net income? * O A. To determine cost of…

A: Solution: Cost of goods sold = Beginning inventory + Purchases - Ending inventory Inventory, end is…

Q: Which of the following statements about FIFO is true? Select one: a. All of the statements are…

A: FIFO is the First-in and First-out method of valuation of Inventory. Under this method, it is…

Q: 9 Goods available for sale equals: Multiple Choice Cost of Goods Sold plus ending…

A: Cost of Goods Sold - Cost of Goods Sold is the cost incurred on the goods to be sold to the…

Q: inventory is added to Total Goods Available for Sale when computing for Cost of Goods Sold. True F

A: Solution: False. The statement that Ending inventory is added to Total Goods Available for Sale when…

Q: When determining gross profit, only the following items must be taken into consideration:    A.…

A: Gross Profit is the revenue earned by the company after subtracting the cost associated with earning…

Q: 1. Which one of the following types of costs is most likely to be included in determining the cost…

A: Answer to the first question: The type of cost that is directly related to the cost of inventory is…

Q: Typically, the impact of the LIFO reserve is to decrease cost of goods sold and decrease ending…

A: LIFO method last in first out so LIFO method take last cost of product into account so do not older…

Q: Which of the following is used to determine the cost of goods sold? a. Beginning Inventory +…

A: Net Purchases = Purchases - Purchase return - Purchase discount Direct Expenses = Freight in etc.

Q: The gross profit method assumes O The beginning inventory plus purchases equal total goods to be…

A: The gross profit indicates the excess amount of revenue over the cost of goods sold and available…

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

A: Net income refers to the income which is calculated by deducting cost of goods sold, expenses,…

Q: How are intercompany sales eliminated? Select one: a. Decrease Parents inventory and Subsidiary…

A: When one company or its subsidiary company , hold more than 50% share in another company , then…

Q: Which of the following is not a step in the retail inventory method process? a.Compute the cost of…

A: The question is based on the concept of Cost Accounting.

Q: How would the following transactions affect the current ratio and the acid-test ratio? (a) Purchase…

A: Current ratio is the ratio between the current assets and current liabilities. It shows the…

Q: 3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e.,…

A: Cost of goods sold (COGS)- The cost incurred on the goods sold during the period is referred to as…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.