Explain the consolidation adjustment needed in group retained earnings and group inventory account for unrealised profit arisen from trading of goods.

Q: which of the following will not be deducted to compute the consolidated cost of goods sold? A.…

A: Consolidated financial statements means financial statements of overall group where company have one…

Q: Analyze and compare the financial statements and ratios of companies, including those thatuse diff…

A: The financial statement represents the financial performance of the entities. It highlights the…

Q: What factors might call for inventory valuation at salesprices (net realizable value or market…

A: Inventory: Inventory refers to the stock of a business which is traded to earn profits.

Q: Which ratio is calculated to ascertain the efficiency of inventory management in terms of capital…

A: Inventory turnover ratio: This is a financial measure that is used to evaluate as to how many times…

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: Changing the method of inventory valuation should be reported in the financial statements under what…

A: Inventory- A manufacturing company's inventory is a critical current asset. Inventory refers to the…

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: In what situation will the unrealized holding gain or losson inventory be reported in income?

A:

Q: Which is a incorrect statement below? A Change in revaluation surplus is an Oci that will be…

A: The income statement shows the net income or net loss that is calculated by deducting the expenses…

Q: Among the various reasons given for the internal transfer of merchandise inventory of a price above…

A: Internal transfer means where one independent department is transferring the goods to another…

Q: Explain whether the following situations, taken independently, would be favorable or unfavorable: (…

A: Favorable is the condition that is positive for a business. This implies that the variance or 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: (b) When are profits realised in relation to inventory transfers within the group?

A: As you have posted multiple independent questions, we are answering the first question. Kindly…

Q: Which is a incorrect statement below? A. Change in revaluation surplus is an OCI that will be…

A: The income statement shows the net income or net loss that is calculated by deducting the expenses…

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: Describe implications of valuing inventory at net realizable value for financial statementsand…

A: Net realizable value means the value at which the inventory can be sold in the market reduced by the…

Q: What types of liabilities, assets, and equity are not assumed to vary directly with sales

A: Solution:- The following types of assets, liabilities, and equity are assumed to vary directly with…

Q: How do you report a gain if a portion of the inventory has been sold?

A: Inventory when purchased is recorded in the financial statements {Part of Cost of Goods sold}…

Q: When is LIFO Inventory a preferred method?   **In regards to Financial Accounting.

A: LIFO (Last in, First out ) : It is an accounting method that an organization uses to determine the…

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: Which of the following is a measure of profitability? Select one: a. Inventory turnover b. Return on…

A: The ratio analysis helps to analyse the financial statements of the business.

Q: Which ratio can provide an indication of the salability of the company's products?

A: Accounting ratios, often known as financial ratios, describe the correlations between the figures on…

Q: Which of the following is a measure of profitability?a. Quick (acid-test) ratiob. Net salesc.…

A: Profitability is that position of the company were the revenue earned is over the expenses incurred…

Q: Which of the following is not an element of the financial statements?A. future potential sales price…

A: Financial statements seem to be reports generated by a corporation's management to demonstrate the…

Q: Why are assets revalued and liabilities reassessed at the time of change in profit sharing ratio?

A: Meaning of Revaluation of AssetsA revaluation of assets is an action that may be required to…

Q: Inventory should be measured at lower of fair value and net realizable value of the inventory.

A: The IAS 2 suggests the requirement for the reporting of the inventories. This states that the…

Q: What does a “downstream” sale of inventory refer to and when is the profit recognized?

A: Downstream sale of inventory: When a parent company transfer goods to any of its subsidiaries, it is…

Q: le of inventory and an downstream sale? Why is it important to know the direction of sale when…

A: Upstream and Downstream sales are normally linked with inter-company sales. Upstream is a subsidiary…

Q: What does an “upstream” sale of inventory refer to and when is the profit recognized?

A: Upstream sale of inventory: When a subsidiary sells goods to a parent company, is referred as…

Q: Which of the following items would we report in the income statement just before net income? a.…

A: Income statement:   The financial statement which reports revenues and expenses from business…

Q: The inventory turnover ratio a. measures management’s ability to productively employ all of…

A: No, option “d” is not the correct answer.

Q: Explain the lower of cost or market rule for inventory valuation and explain why it is GAAP.

A: Lower of cost or market value for inventory valuation is just a mixture of many accounting…

Q: How does inventory turnover provide information about a company’s short-term liquidity?

A:

Q: Which U.S. GAAP principle or rule would apply if the net realizable value of acompany’s inventory is…

A: Net realizable value: Net realizable value is the net amount of receivables which a business expects…

Q: How is inventory management a balancing act between stock- out costs and holding costs?

A: Inventory management is the process of managing and controlling the inventory levels in the…

Q: Items directly affecting Retained Earnings include all of the following Except Choices; Non-Current…

A: Retained earnings is the amount of earnings accumulated over the period of time. Statement of…

Q: FIFO, Average cost, and LIFO are often used for inventory valuation purposes. Compare these methods…

A: Comparison between FIFO, Average Cost, and LIFO: FIFO: The first-in, first-out (FIFO) accounting…

Q: Comprehensive income consists of O operating income + other income and losses net income + other…

A: please like the answer your response matters  comprehensive income consists of other comprehensive…

Q: When are profits realized in relation to inventory transfer within the group

A: There is an unrealized gain in the consolidated financial statements, if the inventory transfers in…

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.