What is the purpose of disclosing the difference between the reported LIFO inventory amounts and replacement cost, assuming that replacement cost is equivalent to a FIFO basis?

Q: what is the cost of its ending inventory at cost? *

A: Retail inventory method refers to an accounting method which is used by the companies to compute the…

Q: Which of the three methods of inventory costing -FIFO, LIFO, or weighted average cost - will in…

A: FIFO - Inventory purchased first is assumed to be sold first. LIFO - Inventory recently purchased is…

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: Describe the alternative approaches for recording inventory write-downs.

A: Inventory write-down: As per GAAP (Generally Accepted Accounting Principles), the companies are…

Q: the difference between periodic inventory and perpetual inventory.

A: Inventory system of book keeping means where proper books of account relating to inventory has been…

Q: Which cost formula for inventory best reflects the current value of inventory on the balance sheet?…

A: inventory valuation methods are based on the flow of inventory. There are mainly four methods of…

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: 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: What is inventory shrinkage? Describe the adjusting entry that would be recorded to account for…

A: Inventory shrinkage: When there is a difference between inventory as per books and actual inventory…

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: How much is the total cost of inventory to be presented in the financial position of XYZ?

A: Inventory valuation is done by the Business Entity as per the rules prescribed under the Relevant…

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

A: Cost of goods  Add: Insurance  Add: Freight

Q: Which inventory system provides a better matching of revenue and expenses - Weighted Average, Moving…

A: Following is the answer to given problem

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: 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: Which of the following inventory cost flow assumptions produces the same ending inventory values…

A: Periodic inventory system is a system where inventory records are updated on a periodic basis but in…

Q: Describe the differences between an inventory system that uses a set quantity (Q)  and one that uses…

A: In a set quantity inventory system the lot size and the order quantity is fixed, while in a fixed…

Q: Which of the following inventory cost flow assumptions produces the same ending inventory values…

A: Periodic Inventory System : In periodic inventory system ending balance of inventory will be updated…

Q: When using the periodic inventory system, which inventory costing method(s) always produces the same…

A: Under the periodic inventory system. the inventory is counted usually at the end of the period and…

Q: Explain the inventory cost flow assumption: FIFO, LIFO, weighted average. Provide examples.

A: The company will purchase the inventory, and it will be sold more than its cost to earn revenue for…

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: 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: 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: Are there different methods used to account for perpetual inventory?

A: Perpetual inventory is a continous estimation of the inventory balances based on our books of…

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 is the effect on the cost of goods sold, gross profit, and net income if ending merchandise…

A: Ending inventory is the value of inventory available on hand at the end of the accounting period.

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: Based on the following data, make a comparison between the use of the flow of inventory costs…

A: Given, sales = $200000 Selling per unit = $5 per unit Total number of units sold = Sales / selling…

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

A:

Q: Which U.S. GAAP principle or rule would apply if the net realizable value of acompany’s inventory is…

A: Net realizable value: Net realizable value is the net amount of receivables which a business expects…

Q: Which of the following statements related to the application of the lower of cost and net realizable…

A: Option B is correct

Q: When using the periodic inventory system and weighted-average inventory costing method, when is the…

A: Periodic inventory system: The method or system of recording the transactions related to 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: Discuss the primary difference between U.S. GAAP and IFRS with respect to determining the cost of…

A:

Q: Which of the following items should not be included in the cost of inventory?

A: All cost of purchases, cost of conversion, and other costs incurred in bringing the inventories to…

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

A:

Q: What is the main difference between a perpetual inventory system and a periodic inventory system?

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: What inventory costing methods are allowed under IFRS? How does this differ from the treatment under…

A: Inventory valuation refers to the valuation of closing stock in hand which is reflected in 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.