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

Q: Under what circumstances is the relative sales value an appropriate basis for determining the price…

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Q: Assuming no beginning inventory, what is the trend of inventory prices if cost of goods sold…

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

Q: difference between inventory and profitability

A: The basic framework of a business is that it purchases goods and services adds value to it and sells…

Q: Which inventory method is least likely to be used under IFRS? C . Weighted average.

A: Introduction: Inventory: Inventory refers to the goods which are held by the business organization…

Q: "Market" is defined in the "Lower-of-cost-or-market" rule required to account for FIFO inventory as:…

A: Inventory- Inventory refers to the items which business kept on hand in order to make the money, it…

Q: Describe diff erent inventory valuation methods (cost formulas).

A: The manner in which an organization calculates the product costs (inventory value assessment)…

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: When assessing inventory management policies, is the current ratio or acid-test ratio more…

A: Current Ratio = Current Ratio is Calculated by dividing the current Assets with current liabilties.…

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: Explain the lower of cost and net realizable value approach to valuing inventory.

A: Merchnadise Inventory: It refers to the current assets that a company expects to sell during 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: Briefly explain the usefulness of the inventory figure resulting from the application of lower of…

A: Net Realizable Value(NRV) refers to the inventory value which a business entity can realize from…

Q: Explain the (a) lower of cost or net realizable value (LCNRV) approach and the (b) lower of cost or…

A: LCNRV (Lower of Cost or Net Realizable Value) approach:   It is an approach that compares the cost…

Q: 1. Inventory should be stated at (a) Lower of cost and fair value. (b) Lower of cost and net…

A: Inventory means the stock of goods in which the businessmen deals. Inventory is to be valued as per…

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: The most common approach to implementing the lower of cost or market rule for inventory valuation is…

A: Inventory means the stock of goods in which the businessmen deals. Inventory is always valued at…

Q: FIFO, average-cost, and LIFO methods are often usedinstead of specific identification for inventory…

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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: item-by-item basis

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

Q: what is the amount allocated to ending inventory on a LIFO basis?

A: Using the LIFO method, the last purchased units are sold first. Periodic inventory records inventory…

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: 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: 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 ratio is calculated to ascertain the efficiency of inventory management? *

A: Inventory Turnover Ratio:-This is the efficiency ratio that measures the efficiency of the company…

Q: Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory?

A: FIFO: Under this method, ending inventory is valued at the latest price and Merchandise sold are…

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: 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: Under IFRS, which of the following methods is not acceptable for the valuation of inventory? a.…

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Q: The application of the lower of cost or market rule to inventory valuation is an example of a. the…

A: The valuation of inventory is done at lower of cost or net realisable value as per relevant…

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: Discuss the primary difference between U.S. GAAP and IFRS with respect to determining the cost of…

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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: 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: Discuss the primary differences between U.S. GAAP and IFRS with respect to the lower of cost or net…

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Q: Determine the value of the inventory at the lower of cost or market by applying lower of cost or…

A:

Q: Define weighted average inventory valuation method

A: There are 7 different method of issue of inventory, 1. First in First Out 2. Last in first out 3.…

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.