What modifications to the conventional retail method are necessary to approximate a LIFO retail flow?

Q: Define the term merchandise returns.

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: What is a LIFO inventory pool?

A: Definition: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So,…

Q: Discuss the accounting for sales allowances and how they relate to the concept of variable…

A: Sales Allowances: Sales allowances are like sales return but there is no physical return of the…

Q: What assumption is usually made concerning sales mix inCVP analysis?

A: Sales mix: A proportion of two or more products sold by the company to maximize the profit, that…

Q: How should a non vat seller treat input vat paid on the purchases from vat supplier of inventories…

A: The major purpose of adopting VAT is to reduce the effects of multiple taxes and the cascading…

Q: Explain an example of dollar value LIFO retail method.

A: Under this method, goods are combined into pools and all increases and decreases in a pool are…

Q: Define Sales discounts.

A: Merchandising businesses: Merchandising companies which buy goods from suppliers, or manufacturers,…

Q: What is the LIFO retail method?

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

Q: What is a Perpetual inventory system?

A: Perpetual Inventory System: The perpetual inventory system records and updates the inventory after…

Q: 1. Identify any two examples of Wholesale Merchandise Business and Retail Merchandise Business

A: Introduction:- A merchandising business, often known as merchandisers, is one of the most common…

Q: what is FIFO inventory method?

A: FIFO inventory method is one of the methods of calculation of value of ending Inventory and cost of…

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

A: Relative sales value is an appropriate basis for pricing inventory when a group of changing units is…

Q: What is the conventional retail method?

A: Retail inventory method: It takes into account all the retail amounts that is, the current selling…

Q: Explain the argument for and against the use of net price method with respect to purchase discounts?

A: The Net Price Method (NPM) provides information about the purchase discounts lost by the company and…

Q: What document initiates the sales process?

A:

Q: How is standalone selling price defined?

A: Performance Obligation: Performance obligation refers to the obligation that the seller to provide…

Q: Subsidiary ledgers in merchandising business?

A: A subsidiary ledger is a subset to the general ledger and it contains the details to support a…

Q: Which one of the following statements best describes the purpose of a purchase order? A It is issued…

A: Purchase Order: A company before purchasing goods invite qoutation of goods from suppliers. When…

Q: How does Just-In-Time (JIT) system help minimize the inventory investment? Explain.

A: Just-In-Time (JIT) is used for that inventory which is owned by business at reduced amount on…

Q: Describe the Issues Pertaining to the Retail Method.

A: Retail inventory method is used to calculate the value of ending inventory by comparing the retail…

Q: Distinguish between the sales values at splitoff method and the NRV method.

A: Sales value at split-off method: Sales value at split-off method allocates joint cost to each joint…

Q: What is the proper accounting for volume discounts onsales of products?

A: Volume discounts: It is an incentive to encourage for an increase in business. The seller issue…

Q: Define sales allowance.

A: Sales allowances: When a customer agrees to buy defective goods or improperly made then seller gives…

Q: What are the assumption of THE LIFO RETAIL METHOD?

A:

Q: Discuss the objects of the cut off on the sales and collection cycle.

A: The cash collection cycle is the number of days it takes to recover accounts receivable. The…

Q: Distinguish between the sales value at splitoff method and the NRV method

A: Sales value at split-off method: Sales value at split-off method allocates joint cost to each joint…

Q: Define Conventional retail method.

A: Definition:   Retail inventory method: It takes into account all the retail amounts that are, the…

Q: Requirement a. What are the accounting requirements for a correct sales​ cutoff?     A. A shipment…

A: Revenue shall be recognition according to accounting standards. Following is the condition to…

Q: What is the definition net cost of purchases?

A:

Q: What is an upstream sale of inventory?

A: The upstream sale of inventory is an inter-company transaction between the parent company and the…

Q: Define the term Purchase Volume?

A: INTRODUCTION Purchases  In accounting, the cost of making purchases during a time period with the…

Q: Explain Retail Terminology with example.

A: Retail terminology: Retail terminology refers to the jargon or technical terms specifically used in…

Q: Define the term Retail Terminology.

A: Accounting:   Accounting is a system, or a process of collecting and organizing economic…

Q: Define the term merchandiser.

A: Cost accounting system: Cost accounting system of an organization consists of procedures and…

Q: How about perpetual inventory system

A: The difference between the recording of the inventory under periodic and perpetual inventory system…

Q: Conceptually, how would you evaluate a quantity discount offerfrom a supplier?

A:

Q: What is Sales Mix and why is it used in retail operations?

A: Sales mix is the proportion of each product sold by a company as a percentage of its total sales.…

Q: The "Allowance for sales discounts" account may be used under Select the correct response: O Net…

A: Solution: Allowance for sales discount is used when sales discount is accounted for using estimates…

Q: What is the most common constraint faced by merchandisers?

A: Most common constraints faced by merchandisers are: Limited Display Space: Small stores find it…

Q: Define Sales returns and allowances

A: The Numerical has covered the concept of Sales Return and Sales Allowance.

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.