gross profit method assumes

Q: When analyzing financial statements, what can you conclude when the inventory turnover ratio…

A: While analyzing the financial statements, we observe that the inventory turnover ratio increases…

Q: Astro company changed its inventory cost flow assumption from FIFO to LIFO in a period of rising…

A: The question is based on the concept of Cost accounting

Q: Indicate whether the following statements are true or false. 1. A merchandising company reports…

A: 1) This statement is True. As Service Based Companies do not sell the products so there Income…

Q: An understatement of ending inventory by $2 million in one period results ina. an overstatement of…

A: Inventory is the detailed list of items that are present on hand. It constitute of all the finished…

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: Jamison Corporation’s inventory cost in its balance sheet is lower using the first-in, first-out…

A: Option b. down is the answer.

Q: If ending Inventory is overstated at the end of the year, profit will be: O Ovestated b) Understated…

A: Inventory valuation includes different methods that are used by companies to find out the value of…

Q: Compared to using the FIFO method to account for inventory, during periods of risingprices, a…

A: USING OF LIFO METHOD

Q: For each item below, indicate whether FIFO or LIFO will generally result in a higher reported amount…

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

Q: A company's inventory cost was lower in FIFO than it would have been using LIFO. Assuming no…

A: Inventory is the stock of goods with the company which is ready to sell out. It covers large…

Q: Assuming that all net sales figures are at retail and all cost of goods sold figures are at cost,…

A: Inventories refer to the stock of goods that is held for the ultimate purpose of resale.

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: Part One: Explanation 1. If merchandise inventory is being valued at cost and the price level is…

A: FIFO, LIFO and weighted average are different cost flow assumptions with regard to the cost of…

Q: If purchases were recorded correctly but ending physical inventory is understated, which one of the…

A: Working capital, conjointly referred to as web assets (NWC), is that the distinction between a…

Q: Under the perpetual inventory system, cost of goods sold is debited when inventory is sold and…

A: Solution: Under perpetual inventory system, inventory is updated with every purchase and sales. Cost…

Q: Overstating ending inventory in the current year causes net income in the current year to be…

A: 1. True 2. False The weighted-average cost includes both beginning inventory and purchases and is…

Q: Astro Company changed its inventory cost flow assumption from FIFO to LIFO in a period of rising…

A: 1. If a company uses the FIFO method and the prices are rising over a period then it means the Cost…

Q: Which of the following statements is correct?

A: Cost of Goods Sold: It refers to the cost of production of the goods sold by the company. Such…

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: What are the effects (UNDERSTATED, OVERSTATED, NO EFFECT AT ALL) of these inventory errors on (a)…

A: Inventory refers to the stock that the company held for resale purposes or the goods that are not…

Q: In a period of rising prices,a. cost of goods sold under LIFO will be less than under FIFO.b. gross…

A:

Q: Question 1  Indicate which one of the following would not appear on both a single-step income…

A: Since question 1 and 2 are incomplete we will answer question 3. Thank you.

Q: Unrealized profit on ending inventory A.will always be paired with a realized profit on beginning…

A: Inventory is the asset reported under the head current asset on the balance sheet of the company. It…

Q: Assuming no beginning inventory, what can be said about the trend of inventory prices if cost of…

A: The Various methods used to valuate inventory are (1) Last In, First Out (LIFO) (2) First In, First…

Q: The gross profit technique implies that A. The value of the inventory has not grown from prior…

A: The amount of ending inventory for a reporting period is estimated using the gross profit technique.…

Q: he economic order quantity is not affected by the a. cost of purchase-order forms. b. safety stock…

A: The economic order quantity (EOQ) is a company's optimal order quantity for minimizing its total…

Q: The inventory at the end of the year was understatedby $14,750. (a) Did the error cause an…

A: (a)

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: What is the cost of inventory of Z Company on December 31?  What amount of cost of goods sold…

A: In weighted average method of inventory valuation, the price of the inventory is based on…

Q: Which of the following statements is correct? Group of answer choices A)When cost of goods sold as a…

A: Cost of goods sold is the total costs that is used to create a product or service, which has been…

Q: A company experiences inventory shrinkage and records the proper entry to account for it. As a…

A: Inventory shrinkage: Any errors or losses of merchandise due to breakage, theft or spoilage are…

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: 1. Prepare the income statement to reflect lower of cost or net realizable value valuation of the…

A: Lower of cost or NRV concept means the inventory should be reported at cost of NRV, whichever is…

Q: Under the perpetual inventory method, what account is credited when adjusting for the estimated cost…

A: Perpetual inventory system is the system of maintaining the inventory records perpetually throughout…

Q: Merchandise inventory at the end of the year is overstated. Which of the following statements…

A: Merchandise inventory at the end of the year is the closing stock which is reported in the balance…

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 using the periodic LIFO inventory cost method, which of the following statements is true? a.The…

A: As per the LIFO method, goods purchased last or most recent purchases would be sold first.   Which…

Q: Using a perpetual inventory system, the return to their supplier of merchandise purchased on account…

A: When merchandise purchased on credit Inventory accout is debited and accounts payable is credited.…

Q: During a period of rising prices, which U.S. GAAP inventory method reports the most current…

A: Definition:

Q: If ending inventory is overstated in the current fiscal year, what effect will this have on net…

A: The question is multiple choice question and related with overstated ending inventory. The ending…

Q: If ending inventory in Period 1 is​ overstated, gross profit in Period 2​ is

A: The correct answer is Understated.