If merchandise inventory is being valued at cost and the price level is decreasing, which of the three methods of costing—FIFO, LIFO, or weightedaverage cost—will yield (a) the highest inventory cost, (b) the lowest inventory cost, (c) the highest gross profit, and (d) the lowest gross profit?

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 variations of the reail inventory method would generally result in the lowest…

A: FIFO is a method used to value inventories. In First-In-First-Out (FIFO) method the cost of the…

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 inventory cost flow assumption generally results in the lowest reported amount for cost of…

A: The answer will be FIFO, First-in, first-out i.e. option B.

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: Using the lower of cost or market, what should the total inventory value be for the following items:…

A: inventory management is considered to be an important part for business. The inventory in accounting…

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: Lower-of-Cost-or-Market Method On the basis of the data shown below:   Item Inventory Quantity…

A: Lower-of-cost-or-market: The lower-of-cost-or-market (LCM) is a method which requires the reporting…

Q: If the ending inventory of a firm is overstated by $49,000, by how much and in what direction…

A: Computation of Income: Gross Profit = Sales – COGS COGS = Opening Inventory + Purchases – Closing…

Q: For each item below, indicate whether FIFO or LIFO will generally result in a higher reported amount…

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

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: Which of the following statements regarding the lower of cost and net realizable value (LCNRV) rule…

A: The rule of valuing the inventory at cost or net realizable value is also called as Prudence concept…

Q: How much are the ending inventory and cost of sales of Thursday Co respectively under average cost…

A: First in, first out:First is, first out is the method of inventory management and inventory…

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: 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: The table below lists financial statement items that may be affected by the use of either the FIFO…

A: Rising costs is the situation when the prices keeps on increasing with time.

Q: ith inflation, what are the implications of using LIFO and FIFO inventory methods? How do they…

A: FIFO: First in, first out (FIFO) is a method of asset management and valuation in which assets…

Q: If costs are rising, which of the following will be true?a. The cost of goods sold will be greater…

A:

Q: Which of the following is the same as 'net realisable value' of inventory?   a. proceeds of sale…

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

Q: Assume that a firm separately determined inventory under FIFO and LIFO and then compared the…

A: FIFO is a method of costing inventory in which the inventory purchased first is out first for…

Q: (b) Will the results in (a) be higher or lower than the results under FIFO and LIFO? Ending…

A: Ending inventory is 100 units at the end of June. So the cost of ending inventory as per following…

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: The process of recording inventory that gives a lower cost of a commodity sold in an income…

A: The inventory can be valued using various methods as LIFO, FIFO and average method.

Q: Explain how the inventory valuation method (LIFO or FIFO) chosen by a company affects the cost of…

A: Inventory management refers to the valuation of inventory in three ways FIFO, LIFO and weighted…

Q: Using the lower of cost or market, what should the total inventory value be for the following items:…

A: Item Inventory quantity Unit cost price Unit market price Total cost price Total market price A…

Q: 1) If the ending inventory is to be valued at approximately lower-of-cost-or-net realizable value,…

A: Cost to retail ratio may be defined as the division of cost of goods available for sale and retail…

Q: Using the lower of cost or market, what should the total inventory value be for the following items:…

A: Value of inventory = Lower of Total cost price and Total market price

Q: Which one of the following statements is true? a. Under conditions of rising prices, the LIFO…

A: Step 1    Last in, first-out (LIFO) is inventory method in which the costs of the most recent…

Q: Complete the chart using the LIFO and FIFO costing methods, assuming a period of increasing costs:…

A: Answer)    Highest Amount  Lowest Amount Cost of Merchandise Sold  LIFO  FIFO…

Q: On the basis of the following data, determine the value of the inventory at the lower of cost or…

A: The inventory needs to e valued at lower of cost or market value which is lower.

Q: If merchandise inventory is being valued at cost and the purchase price is steadily falling, which…

A: Inventory can be valued using many ways such as : FIFO LIFO Weighted Average Average cost

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

A: First-In-First-out (FIFO): FIFO is a method used for recording inventory sold. In this method the…

Q: Which of the following statements about FIFO is true? Select one: a. All of the statements are…

A: FIFO is the First-in and First-out method of valuation of Inventory. Under this method, it is…

Q: Which cost flow assumption generally results in the highest reported amount for ending inventory…

A: First-in-First-Out method: In First-in-First-Out method, the costs of the initially purchased items…

Q: Compared to using the weighted average cost method to account for inventory, during aperiod in which…

A: First-in-First-Out (FIFO):   In First-in-First-Out method, the costs of the initially purchased…

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

A:

Q: a period in which the cost of inventory is rising, which of the following statements is true? The…

A: Issue of Material and its valuation: When the material purchased then that material is stored at its…

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: What is the purpose of the lower of cost or net realizable value rule?

A: lower of cost or net realizable value rule(LCNRV method):Inventory should be valued at the lower of…

Q: In a period of falling prices, the use of which inventory cost flow method would typically result in…

A: The inventory valuation is done at the end of the accounting period. Different techniques are…

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.