Which inventory method provides a better matching ofcurrent costs with sales revenue on the income statementbut also results in older values being reported for inventory on the balance sheet?

Q: complete the following table which compares the effects of LIFO,  FIFO and weighted-average…

A: Inventory valuation in costing is done using mainly three methods namely FIFO, LIFO and weighted…

Q: When using a perpetual inventory system and the weighted-average inventory costing method, when does…

A: Perpetual inventory system: The method or system of maintaining, recording, and adjusting the…

Q: What effect does each method used have on the firm’s reportedprofits? On ending inventory levels?

A: Answer: The following is the effect that each method of inventory on firms reported profits:…

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: Generally accepted accounting principles require that the inventory of a company be reported at:…

A: The inventory can be reported at various values as historical cost, market value, net realisable…

Q: Which of the following statements is correct? Group of answer choices A)The choice of an inventory…

A: SOLUTION AVERAGE COST METHOD IS USED TO CALCULATE THE COST OF INVENTORY AT THE END AND ALSO THE COST…

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 cost formula for inventory best reflects the current value of inventory on the balance sheet?…

A: inventory valuation methods are based on the flow of inventory. There are mainly four methods of…

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: 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: Which inventory system provides a better matching of revenue and expenses - Weighted Average, Moving…

A: Following is the answer to given problem

Q: Discuss and explain the major uses of the gross profit method of inventory estimation.

A: Generally  we get gross profit  after trading a/c prepared it means after net sales  minus net…

Q: In a cost-divided income statement, changes in purchased goods (merchandise) must be reported under…

A: Following is the answer to the given question

Q: For valuation of inventory, the lower of cost or market rule may be applied to a. the total…

A: Inventory of the business should be valued by choosing appropriate method. Lower of cost of market…

Q: Which inventory valuation model serves as a middle-of-the-road approach for taxes and income? a.…

A: Under the FIFO and LIFO, the obtained cost of goods sold can be higher or lower than the actual…

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: For commercial reasons, a weighted average and inventory system from lifo fifo should be considered.

A: The LIFO (Last in, first-out) The LIFO accounting method is used to value inventory. This method is…

Q: Assuming that the price the company pays for inventory is increasing, which method will:

A: The appropriate answer is shown below

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: Which of the following statements is incorrect? Select one: a. By using the IFRS, goods shipped on…

A: Option C is correct.

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

A:

Q: During a period of falling prices, which of the following inventory methods generally results in the…

A: There are 3 types of methods for inventory valuation: a.FIFO b. LIFO c. Weighted average FIFO: In…

Q: 4. Using the FIFO method, the most recent purchases of inventory are assumed to be contained: a. on…

A: Under FIFO method, units purchased earlier are assumed to be sold first and the ending inventory…

Q: Importance of Inventory Valuation What needs to be considered when not only counting inventory, but…

A: SOLUTION- INVENTORY IS GOODS LYING IN THE STOCK OF THE ENTITY WHICH IS EITHER PURCHASED OR…

Q: Explain an example how to calculate inventory turnover ratio.

A: Inventory turnover ratio : Inventory turnover is used to find how many times a company sold its…

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: Explain what is meant by the cost rule or net realizable value, whichever is less, and how it is…

A: As per IAS -02 inventory should be measured on cost or Net realizable value whichever is lower.…

Q: Explain briefly the application of the LCM rule to ending inventory. Describe its effect on the…

A:

Q: Both the gross profit method and the retail inventory method provide a way to estimate ending…

A: Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during…

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: 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: Under which inventory cost flow assumption is the cost of the most recent purchase matched first…

A: >There are various method that can be sued to record the flow of cost to match with the sales…

Q: FIFO, Average cost, and LIFO are often used for inventory valuation purposes. Compare these methods…

A: Comparison between FIFO, Average Cost, and LIFO: FIFO: The first-in, first-out (FIFO) accounting…

Q: When using the periodic LIFO inventory cost method, which of the following statements is true? a.The…

A: As per the LIFO method, goods purchased last or most recent purchases would be sold first.   Which…

Q: The journal entry to record a write-down of inventory from cost to its lower market value includes…

A: Inventory is very important current asset for the business. As per accounting standards, inventory…

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 of the following is not a step in the retail inventory method process? a.Compute the cost of…

A: The question is based on the concept of Cost Accounting.

Q: nventory valuation is used to calculate the cost of goods sold and cost of ending inventory. The…

A: First in First out Method This is one of the popular method of inventory valuation.  While using…

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.