Which cost flow assumption generally results in the highest reported amount for ending inventory when inventory costs are rising? Explain.

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: How do you measure gross margin return on inventory(GMROI)?

A: GMROI is a measure of inventory profitability where, it measures how much profit does the sales…

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 of the following is not an inventory method/cost flow assumption? O a. First-in, first-out O…

A: 5 methods for inventory cost are below: The retail inventory method. The specific identification…

Q: 2 Calculate ending inventory using the lower of cost and net realizable value.

A: The Inventory is  recorded at cost or NRV in the financial position so that inventory is valued…

Q: When assessing inventory management policies, is the current ratio or acid-test ratio more…

A: Current Ratio = Current Ratio is Calculated by dividing the current Assets with current liabilties.…

Q: Identify that if prices are rising, which inventory cost flow method will produce the highest amount…

A: solution Identify that if prices are rising, which inventory cost flow method will produce the…

Q: What is a LIFO inventory pool? How is the cost of ending inventory determined when pools are used?

A:

Q: Which of the following statements is NOT true of Economic Order Quantity? O A. The economic order…

A: EOQ: Economic Order Quantity is basically the optimal quantity of number of orders which in turn…

Q: Why does Target feel that the retail inventory method will result in inventory beingvalued at the…

A: LCM (Lower of Cost or Market) approach:   It is an approach that values the inventory at historical…

Q: Identify the inventory costing method (SI, FIFO, LIFO, or WA) best described by each of the…

A: Each inventory valuation methods possesses its own uniqueness that will affect the financial…

Q: Describe how to find inventory value using the average cost method.

A: Inventory: It is a list of goods or stock of goods which is held for doing a business. It includes…

Q: The weighted average inventory cost flow method is the least used of the inventory costing methods.…

A: Step 1 “Since you have posted a question with multiple questions, we will solve the first question…

Q: In a period of rising prices, the inventory cost allocation method that tends to result in the…

A: In the period of rising prices, method resulting in highest net income would be the method under…

Q: Which of the following might be attributed to efficient inventory management? Select the correct…

A: All of the choices given

Q: The weighted average inventory cost flow method is the least used of the inventory costing methods.…

A: When the inventory is valued at by calculating the weighted average rate per unit for the purchase…

Q: If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower cost of…

A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…

Q: Explain the lower of cost and net realizable value approach to valuing inventory.

A: Merchnadise Inventory: It refers to the current assets that a company expects to sell during the…

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: The cost method that will yield an ending inventory value that is somewhere between possible high…

A: Inventory valuation has 4 Methods - 1. FIFO 2. LIFO 3. Weighted Average 4. Specific Identification…

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: The inventory evaluation method which does not represent the actual ending inventory value is?…

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

Q: Which inventory costing method results in the lowest net income during a period of rising inventory…

A: Answer:LIFO is the correct option

Q: What does a very high inventory turnover ratio signify? Please provide your own example to explain…

A: Inventory turnover ratio is one of the efficiency ratio, which says and calculates how many times…

Q: Which of the following is not a common cost flow assumption used in costing inventory? O First-in,…

A: Companies assign costs to products through inventory costing, often known as inventory cost…

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: Which inventory costing method results in the lowest net income during a period of rising inventory…

A: In case of LIFO method, most of the cost of goods sold is calculated at the latest price since the…

Q: During periods of rising costs, which inventory costing method produces the highest gross profit?

A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…

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: What is the purpose of disclosing the difference between the reported LIFO inventory amounts and…

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

Q: Identify the inventory costing method (SI, FIFO, LIFO, or WA) best described by each of the…

A: The relevant inventory valuation methods are listed as per the given information.

Q: When inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?

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

Q: What is the dollar-value method of LIFO inventory valuation?What advantage does the dollar-value…

A:

Q: Explain the gross profit method of estimating ending inventory.

A: Gross Profit: It refers to the difference between the sales and the cost of goods sold.

Q: What will be the correct answer for weight average cost method for ending inventory and cost of…

A: Weighted average Cost per unit=11-6×$70+14×$10511-6+14=$182019=$95.79

Q: Which cost flow assumption generally results in the highest reported amount of net income in periods…

A: Solution: Under FIFO method, inventory is valued at latest purchase cost. Therefore in period of…

Q: An increasing inventory turnover ratioa. Indicates a longer time span between the ordering…

A: Increased inventory turnover ratio:- It indicates companies are quickly selling their goods in the…

Q: Determine the value of the inventory at the lower of cost or market by applying lower of cost or…

A:

Q: The costs of ending inventory is similar under both periodic and perpetual inventory system if…

A: The given question is related to inventory valuation. The first method of inventory valuation is the…

Q: In order to get the lowest profits possible in periods of rising inventory costs, the company should…

A: Inventory costing is an accounting concept that has direct consequence on company’s gross profit and…

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…

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.