nventory cost flow assumptions address accounting issues except when a.identical units of merchandise are acquired at different unit costs during the period. b.an item is sold and it is necessary to determine its cost. c.both of these choices address inventory accounting issues. d.neither of these choices addresses inventory accounting issues

Q: Both IFRS and U.S. GAAP apply the lower of cost or market method for reporting inventory values. If…

A: LCM Method: Termed as Lower of Cost or Market, this method explains that the inventory of a company…

Q: When identical units of an item are purchased at different costs, an inventory cost flow method O a.…

A: Periodic inventory system:A periodic inventory system is a form of inventory valuation where the…

Q: The three most common inventory cost flow methods are a.FIFO, LIFO, and weighted average cost.…

A: The inventory valuation method is used by the management to evaluate the closing inventory and cost…

Q: 1.  The lower-of-cost-or-market method can be applied to each item of inventory. each major class…

A: In case of multiple questions, we are allowed to solve only the first question. In case if you want…

Q: der the periodic inventory system, all increases and decreases in inventory, such as purchases,…

A: Solution: False.  Under periodic inventory system Daily inventory records are not maintained.

Q: What is the effect on net income if a company failed ro record a purchase in transit (FOB shipping…

A: Purchase in transit (FOB shipping point) means that where buyer become the owner of the goods at the…

Q: IFRS and GAAP are similar for all of the following inventory accounting standards except IFRS…

A: IFRS allows the inclusion of overhead in inventory. In IFRS the use of LIFO cost flow assumption is…

Q: The inventory valuation method that has the advantages of assigning an amount to inventory on the…

A: Inventory means the stock of goods in hand . Goods means the thing in which the business deals and…

Q: 3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e.,…

A: Solution Concepts Purchase account is an expense and if it is understated profit will increase and…

Q: Which of the following statement about the inventory write-down is not correct? * If the cost is…

A: As per International Accounting Standards IAS 2- “ Inventory includes assets that are held for the…

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: The Rider Company uses the gross profit method to estimate ending inventory and cost of goods sold.…

A: In order to accurately estimate the ending inventory under the gross profit method, the cost…

Q: The cost of purchase of inventory does not include: A. Freight handling and other cost directly…

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

Q: Which of the following is not a characteristic of a perpetual inventory system? O Cost of goods sold…

A: Here in this question we are required to answer which of the characteristics is not of perpetual…

Q: Which of the ff needs an adjustment to the A/R account of ABS company? a. goods in transit of the…

A: Under the FOB destination point sale, the seller can record its sales only after the buyer takes the…

Q: nsidered when not only counting inventory, but likewise in the final valuation of inventory?  Why is…

A: Inventory is the goods lying in the stock of the entity which is either purchased or produced, ready…

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: Which of the following statements is incorrect? Select one: a. By using the IFRS, goods shipped on…

A: Option C is correct.

Q: Which of the following accounts is not included in inventory? a. Raw material b. Team c. Finished…

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

Q: Do you agree with the following statements? Express your opinion on each statement. An inventory…

A: 1) This statement is correct  This can be explain with the help of example: Suppose closing stock is…

Q: n perpetual method, _______________ will be credited if an item bought will be returned.    Cost of…

A: In perpetual method, Merchandise Inventory will be credited if an item bought will be returned. Cost…

Q: What is the effect on net income if a company fails to record a purchase in transit (FOB shipping…

A: Accounting for inventory Inventory is all type of goods and products held by the seller to sell in…

Q: Which method tracks the actual physical flow of goods and each item of inventory is marked, tagged,…

A: The correct option in no. 1 question is d. Specific identification method

Q: Multiple choice question In a credit sale of inventory using the perpetual inventory method, which…

A: Perpetual inventory also known as continuous inventory is an inventory system which records the…

Q: Which of the following methods is appropriate for a business whose inventory consists of a…

A: Note: Since we are entitled to answer only one question, we’ll answer the first question. Please…

Q: Which term is applied to the excess of revenue from sales over the cost of merchandise sold? a.net…

A: Income statement: It refers to a financial statement that presents all the income earned by the…

Q: Importance of Inventory Valuation What needs to be considered when not only counting inventory, but…

A: SOLUTION- INVENTORY IS GOODS LYING IN THE STOCK OF THE ENTITY WHICH IS EITHER PURCHASED OR…

Q: The process of recording inventory that gives a lower cost of a commodity sold in an income…

A: The inventory can be valued using various methods as LIFO, FIFO and average method.

Q: The failure to record a purchase of merchandise on account even though the goods are properly…

A: Error of Omission: It is an  error where  no entry  is being recorded even though  transactions  are…

Q: No entry is made to recognize cost of goods sold when inventory is sold under periodic inventory…

A: Solution: Under periodic inventory system, inventory is not updated with every purchase and sales,…

Q: When the merchandise inventory account provides a running balance of the goods on hand, which…

A: The question is related to Inventory system. There are two methods of Inventory.Perpetual inventory…

Q: Assuming that the amount of the physical count of the stock of merchandise is less than the recorded…

A: Perpetual Inventory System:- It is a system where inventory purchases and returns are recorded…

Q: In Perpetual inventory system the loss of goods is included in a. Sales b. Closing stock c.…

A: The perpetual inventory system is a type of inventory valuation in which the inventory sold and…

Q: inventory is added to Total Goods Available for Sale when computing for Cost of Goods Sold. True F

A: Solution: False. The statement that Ending inventory is added to Total Goods Available for Sale when…

Q: When identical units of an item are purchased at different costs a. an inventory cost flow method…

A: The inventory cost flow method states the manner to record the cost of goods sold and cost of ending…

Q: Allowance Method in accounting for inventory write-down

A: Statement I is correct because Allowance method is required to be followed in accounting for…

Q: The retail inventory method requires a company to value its inventory on the balance sheet at retail…

A: The retail inventory method is an accounting process wherein the estimated or approximate value of…

Q: Match each definition with the term that best describes it. An income measure that includes gains…

A: Income statement: The income statement determines the net income of the business by subtracting the…

Q: In a period of falling prices, the use of which inventory cost flow method would typically result in…

A: The inventory valuation is done at the end of the accounting period. Different techniques are…

Q: 3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e.,…

A: Cost of goods sold (COGS)- The cost incurred on the goods sold during the period is referred to as…

Q: Petco Inc. uses the periodic inventory system. Assess the effect on net income of including goods in…

A: Not including the fob shipping purchases in the ending inventory will understate the ending…

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.