The primary objective of inventory accounting is to a. Determine the peso amount at which inventory and cost of sales should be reported. b. Match appropriate costs against revenues in order that there may be a proper determination of net income. c. Allocated the cost of goods available for sale between inventory and cost of sales. d. Value inventory at the lower of cost or market.

Q: Under a perpetual inventory system, what are the four inventory costing methods and how does each…

A: The four inventory costing methods are: Specific identification FIFO (First-In, First-Out), LIFO…

Q: Estimate ending inventory and cost of goods sold using the gross profit method.

A: Under gross profit method, calculation of cost of goods sold: Cost of goods sold = Sales* ( 1 -…

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

A: Under FIFO method the oldest products in stock is used to assess the cost of products sold. To put…

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: Which of the following statements regarding the cost of transportation-in for the purchase of…

A: Cost of goods sold = Beginning inventory + Purchase of merchandise  + Transportation in - Ending…

Q: The amount shown in the balance sheet debit column of worksheet for Merchandise Inventory​ is:   A.…

A: Merchandise inventory: It can be defined as any type of manufactured goods that are acquired by the…

Q: In a periodic inventory system, the cost of merchandise purchased includes the cost of

A: Statement is TRUE  In a periodic inventory system, the cost of merchandise purchased includes the…

Q: Which inventory method provides a better matching ofcurrent costs with sales revenue on the income…

A: Inventory valuation is a method of finding the actual cost of the goods left unsold at the end of a…

Q: Inventory on the Balance Sheet On the basis of the following data, determine the value of the…

A:

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: Discuss and explain the major uses of the gross profit method of inventory estimation.

A: Generally  we get gross profit  after trading a/c prepared it means after net sales  minus net…

Q: 1.What are the three primary inventory cost flow assumptions? 2. How is cost of goods sold…

A: Since you have posted multiple questions, we will do the first one for you. To get the other…

Q: At what amount will the inventory and cost of goods sold amounts be reported on the financial…

A: As per the accounting standards, the closing inventory must be reported at lower of cost or net…

Q: In a cost-divided income statement, changes in purchased goods (merchandise) must be reported under…

A: Following is the answer to the given question

Q: T, F. Under the GAAP rule, inventories can be reported at above cost in the balance sheet. T, F. If…

A: Under GAAP rules , inventory is valued at cost or net realizable value which ever is lower due to…

Q: his account is used to recognize the cost of an inventory that is sold as expens

A: Solution: When inventory is sold, then this cost should be transferred to Cost of goods sold…

Q: i. Determine the cost assigned to the ending inventory by using FIFO method of inventory valuation…

A: LIFO means last in first out where as FIFO means first in first out. Inventory and cost of goods…

Q: Listed below are several terms and phrases associated with inventory measurement. Pair each item…

A: FIFO : First-in-first-out LIFO : Last-in-first-out Gross method : The sales / purchases are recorded…

Q: The two main inventory accounting systems are the a. perpetual and periodic. b. purchase and sale.…

A: Purchase and sale are the transaction made by the company. It is not an inventory system. Returns…

Q: Regardless of the inventory costing system used, cost of goods available for sale must be allocated…

A: Cost of good available comprises of beginning inventory and purchases during the period and 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: 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 inventory cost appears as a Cost of goods sold in an Income statement under FIFO method?

A: “First-In, First-Out” is a method used for cost flow assumption purposes in the cost of goods sold…

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: 4. Using the FIFO method, the most recent purchases of inventory are assumed to be contained: a. on…

A: Under FIFO method, units purchased earlier are assumed to be sold first and the ending inventory…

Q: The retail inventory method would include which of the following in the calculation of the goods…

A: An accounting method which is being used for the purpose of measuring the merchandise in the store…

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: 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: 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: Assuming that a perpetual inventory system is used, determine the cost of goods sold and the ending…

A: Inventory valuation refers to the methods used by the company to determine the value of its…

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: What is the correct entry to write off the inventory under perpetual method? Dr. Cost of Goods sold…

A: The Perpetual Inventory System is a highly preferred system as it can produce accurate results…

Q: Both the gross profit method and the retail inventory method provide a way to estimate ending…

A: Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during…

Q: Which one the following types of cost is most likely to be included in determining the cost of…

A: Freight in cost is concerned with the inventory value and should be included in determining the cost…

Q: Compute for the cost of ending inventory and cost of goods sold under Moving average (Perpetual…

A: Moving average method of inventory valuation says that cost or value of inventory changes after each…

Q: a. Assuming that the perpetual inventory system is used, costing by the LIFO method, determine the…

A: a. The following calculations shows the COGS and ending inventory for prepaid cell phones:…

Q: (A) Using the FIFO assumption, calculate the amount charged to cost of goods sold, the value of the…

A:

Q: If the balance in the inventory account is greater than the physical count, which of the following…

A: When inventory is found to be greater than physical count , we need to increase inventory. For…

Q: 1. Which one of the following types of costs is most likely to be included in determining the cost…

A: Answer to the first question: The type of cost that is directly related to the cost of inventory is…

Q: 1. Before inventory purchases are recorded, the receiving report should be reconciled to what…

A: Inventory: Inventory refers to the raw materials, work in progress, and finished goods that are held…

Q: Cost of goods available for sale consist of two elements: beginning inventory and ending inventory…

A: Introduction: Beginning inventory: Inventory value at the beginning of the accounting period called…

Q: Which of the following is not a step in the retail inventory method process? a.Compute the cost of…

A: The question is based on the concept of Cost Accounting.

Q: nventory valuation is used to calculate the cost of goods sold and cost of ending inventory. The…

A: First in First out Method This is one of the popular method of inventory valuation.  While using…

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: 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…

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.