Which of the following regarding the lower of cost ormarket rule for inventory are true?(i) The lower of cost or market rule is an example of thehistorical cost principle.(ii) When the market value of inventory drops belowthe original cost of inventory shown in the financialrecords, net income is reduced.(iii) When the market value of inventory drops belowthe original cost of inventory shown in the financialrecords, total assets are reduced.a. (i) only c. (ii) and (iii)b. (ii) only d. All of the above

Q: which of the following will not be deducted to compute the consolidated cost of goods sold? A.…

A: Consolidated financial statements means financial statements of overall group where company have one…

Q: Proponents of the LIFO Inventory cost flow assumption argue that this costing method is superior to…

A: LIFO is one of the inventory methods used to account for inventory. Here the inventory of the…

Q: Q2. Which of the following inventory valuation methods typically results in the highest reported…

A: B) Last - In, First - Out (LIFO)Explanation:LIFO (Last-in, First-out) is typically used during…

Q: Consider the following scenarios: Case A: The company capitalized costs to inventory that should not…

A: The accounting policies like methods for inventory valuation, depreciation method, valuation of…

Q: Which one of the following sets of inventory cost flow assumptions is not susceptible to profit…

A: FIFO and average cost methods are considered as the sets of inventory cost flow assumptions that are…

Q: To hold back unrealized profit in ending inventory, cost of goods sold is decreased. True or False?

A: Unrealized profits in the literal sense means those profits that are not realized yet. Unrealized…

Q: Which of the following statements about the LIFO Reserve Disclosure is NOT true?  a. Usually, FIFO…

A: The credit balance in the LIFO reserve reports the difference since the time that LIFO was adopted.…

Q: When following U.S. GAAP, the lower-of-cost-or-market rule for inventory requires a firm to report…

A: As per U.S. GAAP, the inventory should be reported in the balance sheet at their Cost or Market…

Q: Compare the financial effects (ignore income tax) of using period of declining prices on the…

A: Depreciation is the process of reducing the value of the assets. It is a non-cash expense of the…

Q: Lower of cost and net realizable value a. results in the lowest valuation if applied to the total…

A: It is preferable to value the inventory at lower of cost or net realizable value (LCNRV) in…

Q: Which one of the following inventories may not be valued for balance sheet purposes at the…

A: Inventory is valued only at lower of Cost or Net realizable value(which is the selling price minus…

Q: Which of the following is not a disadvantage of using the FIFO cost flow assumption? includes all…

A: Lets understand the basics.There are various methods follow to calculate inventory balance. It…

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: During a period of rising inventory prices the LIFO cost flow method will result in higher total…

A: LIFO means last in first out which means that newest inventory will be sold first , where as FIFO…

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: Which inventory valuation method would yield the lowest cost of goods sold in periods of rising…

A: FIFO method in full terms stands for First in First Out,is an important part Accounting.It is…

Q: For companies using LIFO inventory, the lower-of-cost-or-market rule tor inventory tequires a kim to…

A: The lower-of-cost-or-market (LCM) rule for inventory, especially for companies using LIFO (Last In,…

Q: The procedure selected to calculate the cost of the ending inventory has absolutely no effect on the…

A: Eliminating the incorrect option:The method chosen to calculate the cost of ending inventory does…

Q: When the cost of inventory is increasing: LIFO shows lower COGS and lower taxable income FIFO shows…

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

Q: Assuming rising inventory prices, which statement is correct? Group of answer choices A. FIFO…

A: INTRODUCTION: First in, first out, or FIFO, is a technique of valuing assets or inventories. The…

Q: Which of the following is true regarding LIFO and FIFO? A) In a period of decreasing costs, LIFO…

A: First in first out is also written as FIFO and last in first out is also written as LIFO. These are…

Q: 11. What is the effect on cost of goods sold, gross profit, and net income if ending mer- chandise…

A: Error in inventory recording can be cancelled or we can say nullified within two consecutive…

Q: The major criticism of the lower of cost or market rule for valuation of inventory is that

A:

Q: Overstating ending inventory in the current year causes net income in the current year to be…

A: 1. True 2. False The weighted-average cost includes both beginning inventory and purchases and is…

Q: Compare the financial effects (ignore income tax) of using the FIFO and average inventory cost…

A: FIFO FIFO Means First in, First Out. It is one of the Important Method of Valuation of Inventory.…

Q: The gross profit method and retail inventory method C Are both estimates of ending inventory and…

A: In company, there is a requirement of valuation of the inventory to find out the cost of the goods…

Q: During periods of declining prices, when comparing LIFO and FIFO inventory methods:   A. LIFO…

A: FIFO is first in first out inventory valuation method which says that inventory which is purchased…

Q: In a period of falling prices, which inventory method would result in the lowest tax burden? a.…

A: FIFO is first in first out which means inventory bought first is sold first.LIFO is last in first…

Q: If beginning inventory is understated, then: a. goods available for sale will be overstated. b.…

A: The cost of goods sold represents the direct costs of producing goods or purchasing them for resale…

Q: Which inventory method will result in lower net income in a period of rising prices? Which inventory…

A: First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value…

Q: Solve this problem with question

A:

Q: the lower cost or market is a method of inventory valuation true or false?

A: Inventory valuation is the accounting process in which the monetary value assigned to the unsold…

Q: When there are no inventory at the beginning or at the end of the period, the total purchases will…

A: Cost of sales means actual cost of goods that is being sold to the customers. It includes beginning…

Q: Which U.S. GAAP principle or rule would apply if the net realizable value of acompany’s inventory is…

A: Net realizable value: Net realizable value is the net amount of receivables which a business expects…

Q: 13. Which is not acceptable for valuation of inventory? a. historical cost c. prime cost d.…

A: Inventory should be valued at cost or Net realisable value whichever is lower.   ▪︎Cost may be the…

Q: The original cost of an item of inventory is above its replacement cost. The item s replacement cost…

A: Under the lower of cost or market (LCM) method, inventory is valued at the lower of its original…

Q: For the same transactions, why does the weighted-average cost method provide different value for…

A: The key difference between the two systems is the timing of cost calculations. In a perpetual…

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.