How is the allowance for the inventory write-down shown in the statement of financial position? a. As a deduction from inventory at cost. b. As a deduction from the inventory of NRV. c. As an asset. d. As a liability.

Q: Determine the effects of inventory errors on the financial statements.

A: If you understated ending inventory, your cost of goods sold will be overstated by the error amount,…

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

A:

Q: Merchandise inventory is classified on the balance sheet as a a. current liability b. current…

A: Assets can be classified as current asset and long-term assets. Liabilities can be classified as…

Q: Which of the following should not be taken into account when determining the cost of inventory? a.…

A: Solution:- The following should not be taken into account when determining the cost of inventory as…

Q: If the net realizable of an entity's inventories is less than its cost, the entry to adjust the…

A: Introduction: Under the lower of cost or net realizable value (LCNRV) method, if net selling price…

Q: Under which inventory cost flow assumption is the cost of the most recent purchases likely to remain…

A: Inventory valuation methods include: First-in first-out (FIFO) Method  Last-in first-out (LIFO)…

Q: Compute for Unrealized gross profit in ending inventory- current yr. *

A: Gross profit is the profit which is earned by the company when from the sales all costs of goods…

Q: Indicate the effects of inventory errors on the financial statements

A: Solution- 1-A merchandising company must be sure that it has properly valued its ending inventory.…

Q: total amount of inventory should DEF report for the consigned goods?

A: Cost of goods  Add: Insurance  Add: Freight

Q: is a measure of inventory profitability that relates a gross margin to the cost of the inventory.

A: Inventory profitability means profits related to inventory cost which are calculated using these two…

Q: Consider each of the following independent situations. Should a company report the goods in its…

A: A consignee is an agent who sells the goods Received on consignment and has no economic control over…

Q: For valuation of inventory, the lower of cost or market rule may be applied to a. the total…

A: Inventory of the business should be valued by choosing appropriate method. Lower of cost of market…

Q: according to which section (s) in the Accounting Act the inventory is assessed. Explain your reasons…

A: Inventory includes the goods available for sale in the normal course of business or the finished…

Q: What is the difference between a perpetual inventoryand a physical inventory? If a company maintains…

A: Differentiate between a physical inventory system and a perpetual inventory system. Perpetual…

Q: The cost of inventory sold during the current year is clansified as atri in the O Liability, Balance…

A: The Inventory sold will create an income for the for the firm. Whereas, the cost of goods that are…

Q: Under which method of inventory valuation, the average price used for valuation of goods issued is…

A: Inventory is the material in which the business deal. It is a very important component of company…

Q: How about the cost of inventory held by the consignee

A: Cost of inventory includes purchase cost of inventory, it's conversation cost and any other expenses…

Q: Under the new revenue recognition standard, how is the sale of inventory recorded?

A: Revenue: It refers is the total amount of earnings generated from selling goods or rendering…

Q: item-by-item basis

A: The Item by Item method utilizes the principle and calculates the value of inventory based on the…

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 are the reasons for making an estimate of the value of ending inventory?

A: Inventory- It is the amount of those units which is not sold yet by the entity or the units which…

Q: Merchandise Inventory is classified on the balance sheet as? O A. Current Liability O B. Non-current…

A: Merchandise inventory is the goods in hand that the company holds. It is classified as a current…

Q: Required: 1. Prepare the income statements to reflect the correct amounts, taking into consideration…

A: Overstatement of ending inventory will reduce the cost of goods sold and also increase the opening…

Q: How does the inventory method chosen can have a significant effect on the amount of income reported…

A: Inventory is an important asset for the business. And its accounting has two methods of inventory…

Q: What are the reasons for making an estimate of the value of ending inventory?

A: Ending inventory is the value of goods available in the stock at the end of the period

Q: what are the effects of inventory errors on the financial statements

A: Incorrect recording of Inventory balance results in the Inventory errors.

Q: How does an inventory error effect the financial statements?

A: Inventory error:   Inventory errors are sometimes caused by making mistake in physical count, in…

Q: Explain what is meant by the cost rule or net realizable value, whichever is less, and how it is…

A: As per IAS -02 inventory should be measured on cost or Net realizable value whichever is lower.…

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

A: When a corporation values its inventory using FIFO, it reports reduced COGS, which boosts its gross…

Q: following is accounted for prospectively? Change in reporting entity. Change in…

A: A change in an estimate is accounted for prospectively.

Q: What is the purpose of disclosing the difference between the reported LIFO inventory amounts and…

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

Q: Describe the accounting treatment for a change in inventory method other than to LIFO.

A: Method of Inventory: Inventory refers to the current assets that a company expects to sell during…

Q: If consignment inventory is unsold at the end of the period, who reports the ending inventory on the…

A: Consignment inventory is a property of consignor and the consignor will have all the rights with…

Q: What is the measurement value of inventory? Select one: a. Expected Value b. Fair Value c.…

A: Inventory are the goods which the businesses held for the sale.

Q: Inventory is classified as : Select one: a. a current asset on the balance sheet b. either an…

A: Inventory can be defined as the goods or items which are stored by the business either for selling…

Q: Explain the gross profit method of estimating ending inventory.

A: Gross Profit: It refers to the difference between the sales and the cost of goods sold.

Q: Merchandise inventory is reported under the classification of O Property, Plant, and Equipment on…

A: Merchandise inventory valuation done as per IAS-2

Q: he amount of any write down of inventory to net realizable value and all losses of inventory shall…

A: The international accounting standard 2 (IAS 2) contains the rules related to inventories.

Q: Which of the following inventory method measures most closely the current cost of inventory?   a.…

A: The inventory valuation is carried out at the end of the accounting period. The different inventory…

Q: how do I find the amount of inventory under the dollar value using the LIFO method?

A: Dollar value LIFO Method: Dollar value LIFO is a method which is basically used for inventory that…

Q: Under what circumstances do generally accepted accounting principles permit the use of an inventory…

A: Solution-   688-8-3DQ SA -3946 SR- 2606     Generally accepted accounting principles allow the…