By having different inventory methods that result in different costs of goods sold and gross profit, aren’t you encouraging “playing with the numbers”?

Q: Why do better decisions regarding the purchasing and managing of goods for sale frequently cause…

A: Costing: Costing is a technique used in cost accounting to determine the cost of a product. With the…

Q: Which one of the following sets of inventory cost flow assumptions is not susceptible to profit…

A: FIFO and average cost methods are considered as the sets of inventory cost flow assumptions that are…

Q: Most companies report their lower of cost or market write-down expense as a O Cost of Goods Sold O…

A: Most companies report their lower of cost or market write-down expense as ______ expense even if the…

Q: Can you explain why the answer is B and not C. If inventory prices are decreasing wouldnt LIFO…

A: Yes, you are right in the falling inventory prices, the LIFO method would result in the selling of…

Q: When inventory unit costs are increasing: Group of answer choices a)FIFO will result in higher…

A: FIFO refers to the method of inventory costing where items purchased first are sold first.

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: Please answer in detail and tell me why other options are incorrect........   The most useful…

A: Following methods are used to find the valuation of the ending inventory 1) FIFO - First in first…

Q: Which of the following statements is NOT true of Economic Order Quantity? O A. The economic order…

A: EOQ: Economic Order Quantity is basically the optimal quantity of number of orders which in turn…

Q: In times of decreasing prices, LIFO will result in ____ costs of goods sold and _____ ending…

A: FIFO: FIFO stands for First-In, First-Out.  In this method inventory purchased first will be sell…

Q: Which of the following variations of the retail inventory method would generally result in the…

A: Rising prices basically means the situation where the prices of inventory keep on rising with each…

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 ability to lower overall inventory warehousing costs is an advantage of which type of system…

A:

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: For all short exercises, assume the perpetual inventory system is used unless stated otherwise.…

A: Inventory Costing Method:   Under inventory costing method, the flow of cost of inventory is…

Q: I need help with both of these please, I don't understand how to do FIFO, LIFO and weighted average…

A: NOTE :- Since more than one problem is posted I am providing you the answer for first question.…

Q: Identify which of the statements below are true (T) or false (F). Lean businesses aim to: Reduce…

A: Lean businesses aim to: Reduce inventory levels--true

Q: “Managers should always buy inventory in quantities that result in the lowest purchase cost per…

A: Inventory:  Inventory refers to the raw materials, work-in process, and the finished goods products…

Q: When purchase prices are rising, which of the following statements is true? a.LIFO produces a…

A: FIFO method means first in first out which means that cost of goods sold valued at older prices and…

Q: Keeping track of inventory and keeping carrying costs down.  How do you think those issues would…

A: If business organized their inventory management system, the warehousing cost tends to be reduced…

Q: If costs are rising, which of the following will be true?a. The cost of goods sold will be greater…

A:

Q: Explain inventory turnover? Can this be too high ever

A: Inventory turnover ratio means the time old inventory is replaced with new inventory with in a year.…

Q: Can an inventory turnover be too high?

A: The inventory turnover ratio is nothing but the number of times an entity is replacing the goods. It…

Q: What does a very high inventory turnover ratio signify? Please provide your own example to explain…

A: Inventory turnover ratio is one of the efficiency ratio, which says and calculates how many times…

Q: Which inventory method will result in lower net income in a period of rising prices? Which inventory…

A: First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value…

Q: Which statements below are true? 1. LCM and LCNRV may be applied by individual products, by…

A:

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: Which of the following is the advantage of using weighted average inventory valuation? When prices…

A: Under FIFO, beginning purchases constitutes the cost of goods sold and ending purchases are the…

Q: Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing…

A: Perpetual Inventory System is an accounting system of valuing the inventory where there is a need…

Q: Are you correct that, by using LIFO, Kroger reports lower inventory and lowerprofits? Why would…

A: Perpetual and periodic inventory system: In merchandise business, there are two types of inventory…

Q: During periods of rising costs, which inventory costing method produces the highest gross profit?

A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…

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: 1.  Which of the following assumptions is false in a cost-volume-profit analysis? Total sales and…

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

Q: How should accounting be able to catch up with the high sales return rates, particularly on…

A: Inventory management: Inventory management can be defined as a system to measure and record the…

Q: Explain how the retail inventory method can be made to approximate the lower of cost or market rule.

A: Retail inventory method:   It takes into account. all the retail amounts that is, the current…

Q: When inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

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: What is the dollar-value method of LIFO inventory valuation?What advantage does the dollar-value…

A:

Q: Which of the following statements about the margin of safety is (are) correct? a. producing units…

A: Margin of safety is difference between actual sales and break even sales. Sales of more units…

Q: In order to get the lowest profits possible in periods of rising inventory costs, the company should…

A: Inventory costing is an accounting concept that has direct consequence on company’s gross profit and…

Q: 2. Shepherd Cycles does not expect prices to change dramatically and wants to use a method that…

A: An inventory valuation allows a business to assign a monetary value to items in its inventory.…

Q: Which cost flow assumption generally results in the highest reported amount of net income when…

A: FIrst in first out or FIFO cost flow assumption provides highest net income when inventory prices…

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.