When a company uses LIFO for external reporting purposes FIFO for internal reporting pusposes, an Allowance to Reduce Inventory to LIFO account is used. This account should be reported?                                                               A) on the income statement in the other Revenue and gains section. B) on the income statement in the cost of goods sold section. C) on the income statement in the other Expenses and losses section. D) on the balance sheet in the current asset section.

Q: For each of the following accounts used by a retail business, determine its classification: asset,…

A: Contra assets are those whose accounts balance is credit. Generally, all asset accounts show debit…

Q: Which of the following statements is correct? Group of answer choices A)Revenue is recognized at the…

A: A)Revenue is recognized at the time of shipment when goods are shipped FOB destination-The given…

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: Which of the following is not permitted as a cost of inventory?

A: Which of the following is not permitted as a cost of inventory? Answer - b) Storage costs

Q: Which of the following statements is correct in the context of the Income Statement prepared by a…

A: The Income Statement is prepared in order to show the result of operating a business for a period of…

Q: According to the expense recognition principle, inventory costs are expensed as cost of goods sold…

A: True

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: Which income statement account(s) would be affected by a policy choice at the same time as the…

A: Inventory is directly related to the cost of goods sold. To change the policy of valuation of…

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: Which of the following needs an adjustment to the accounts receivable account of ABC Company? a.…

A: Accounts receivable are created by an organisation when it records sales on credit. The accounts…

Q: The Cloud Company employs a perpetual inventory system and the McKenzie Corporation uses a…

A: Definition:   Perpetual and periodic inventory system: In merchandise business, there are two types…

Q: Margo Company uses the periodic inventory method and had the following inventory information…

A: Inventory valuation is the process of determining the cost of inventory at the end of the reporting…

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: Why would a company choose to use an inventory costing method that estimates the cost of the goods…

A: In this question, we  explain that why would a company choose to use an inventory costing method…

Q: BJ Company uses a periodic inventory system. If the company?'s beginning inventory in the current…

A:

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: 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: If purchases were recorded correctly but ending physical inventory is understated, which one of the…

A: Working capital, conjointly referred to as web assets (NWC), is that the distinction between a…

Q: When a periodic inventory system is used, a.only revenue is recorded each time a sale is made.…

A: Under perpetual inventory, both the sales entry and cost of goods sold entry are recorded each time…

Q: When preparing a worksheet for a merchandising company using periodic inventory system, which…

A: 1. The income statement contains all temporary accounts and the balance sheet contains all the…

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

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

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 one of the following statements is not true? a. A company using the periodic system does not…

A: At the end of the period, there is still a need to match the inventory value with the physical…

Q: When preparing interim financial statements, what two methods can companies utilize to estimate cost…

A:

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: Under the new revenue recognition standard, how is the sale of inventory recorded?

A: Revenue: It refers is the total amount of earnings generated from selling goods or rendering…

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: When a company changes its inventory method to LIFO, an exception is made for the way accounting…

A: Explain the difference in the accounting treatment of a change to the LIFO inventory method from…

Q: Manual, what method is used in computing the ending inventory of materials and supplies?   First-in,…

A: there are different methods available for valuation of the inventory is available. for most of the…

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: Which of the following is not a reason for the physical inventory count to differ from what…

A: Inventory is one of the important current asset of the business. This can be in form of raw…

Q: following is accounted for prospectively? Change in reporting entity. Change in…

A: A change in an estimate is accounted for prospectively.

Q: Which of the following statement is FALSE for Merchandise inventory of the Business? a. It is a…

A: Merchandise inventory is classified as a current asset on the balance sheet. Assets normally have a…

Q: a. Permits entities to avoid taking an annual physical d. Provides a method for inventory control…

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

Q: Merchandise inventory is * reported under the classification of O Property, Plant, and Equipment on…

A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

Q: You are comparing two companies, Ying Ltd and Yang Corporation, in the same industry. Ying focuses…

A: Inventory: Inventory can be defined as the current assets of the company that includes the raw…

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: What is the reason for the understatement of the net income reported by the branch in its separate…

A: Solution Cost of good sold is the cost acquiring or manufacturing the product that a company sells…

Q: The accountant for the Fred Company did not record a purchase of merchandise on credit or include…

A: The question is multiple choice question. Required  Choose the Correct Option.

Q: he amount of any write down of inventory to net realizable value and all losses of inventory shall…

A: The international accounting standard 2 (IAS 2) contains the rules related to inventories.

Q: Which of the following is not reported in an income statement under IFRS? a.    Discontinued…

A: Definition: Income statement refers to the financial results of business for the period of time.

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.