4. The purchase of inventory items on account using the perpetual inventory method a. Has no effect on the current ratio but decreases working capital. b. Has no effect on working capital but decreases the current ratio. c. Decreases working capital and the current ratio. d. Has no effect on working capital nor the current ratio. 5. The cost of inventories shall be measured using a. Either FIFO, average method or LIFO b. Average method c. Either FIFO or average method d. FIFO

4. The purchase of inventory items on account using the perpetual inventory method a. Has no effect on the current ratio but decreases working capital. b. Has no effect on working capital but decreases the current ratio. c. Decreases working capital and the current ratio. d. Has no effect on working capital nor the current ratio. 5. The cost of inventories shall be measured using a. Either FIFO, average method or LIFO b. Average method c. Either FIFO or average method d. FIFO

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

When there are no inventory at the beginning or at the end of the period, the total purchases will be: A equal to gross profit. B equal to cost of sales. impossible to determine. equal to net sales.
To determine the cost of ending inventory using the LIFO method: A. the average cost of the inventory is used. B. the beginning inventory and earliest purchase costs are used. C. the specific unit cost of the inventory is used. D. the latest purchase costs are used. thanks
Explain briefly the application of the LCM rule to ending inventory. Describe its effect on the balance sheet andincome statement when market is lower than cost
1a The inventory cost flow method that reports the earliest costs in ending inventory is a. LIFO b. weighted average cost c. FIFO d. specific identification
The original cost of an item of inventory is above its replacement cost. The item s replacement cost is below its net realizable value but is higher than its net realizable value minus a normal profit. Under the lower of cost or market method, the inventory item should be valued at: a. Net realizable value. b. Original cost. c. Replacement cost. d. Net realizable value less normal profit margin.
Which inventory cost flow assumption does IFRS not allow? a. Specific identification. b. FIFO. c. LIFO. d. Average cost.
The following are several figures reported for Poyer and Sutter as of December 31, 2024: Sutter $ 280,000 760,000 Items Inventory Sales Investment income Cost of goods sold Operating expenses Poyer $ 480,000 960,000 480,000 220,000 380,000 290,000 Poyer acquired 90 percent of Sutter in January 2023. In allocating the newly acquired subsidiary's fair value at the acquisition date, Poyer noted that Sutter had developed a unpatented technology worth $74,000 that was unrecorded on its accounting records and had a five-year remaining life. Any-temaining excess fair value over Sutter's book value was attributed to an indefinite-lived trademark. During 2024, Sutter sells inventory costing $128,000 to Poyer for $176,000. Of this amount, 15 percent remains unsold in Poyer's warehouse at year-end. Required: Determine balances for the following items that would appear on Poyer's consolidated financial statements for 2024: Note: Input all amounts as positive values.
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?
H7. For the same transactions, why does the weighted-average cost method provide different value for ending inventory and COGS depending on whether the periodic or perpetual inventory system is used? Select one: a. Perpetual inventory calculates and assigns costs as items are sold, while periodic inventory calculates and assigns costs at the end of the period. b. Perpetual inventory calculates and assigns costs at the end of the period, while periodic inventory calculates and assigns costs as items are sold. c. Perpetual inventory counts all the purchases for the month first before calculating the average cost, while periodic calculates the average cost after every transaction. d. Perpetual inventory and periodic inventory will not provide different values using Explain also wrong options and explain with details
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1. At the end of a period, the inventory account is _______. 2. Gross sales less sales discounts and sales returns and allowances equals____. 3. When an unearned, The revenue will go____. 4. Sales returns and allowances are used in calculating _______. 5. Ending inventory represents goods not yet ________. 6. Inventory is increased by a _______.
Ending inventory is added to Total Goods Available for Sale when computing for Cost of Goods Sold. True False