Allowance Method in accounting for inventory write-down

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: Under what circumstances would a company need to estimate its inventory? What are the differences…

A: The worth of the items in your inventory at the time of your most recent physical count is the…

Q: a) Compare the periodic versus the perpetual system as a control device. b) What sort of…

A: The periodic and perpetual inventory Systems are two systems used to track the quantity of goods…

Q: The following information for Tuell Company is available:                              1. Assume…

A: Inventory refers to all of the items, goods, commerce, and materials held by a company for the…

Q: Petco Inc. uses the periodic inventory system. Assess the effect on net income of including goods in…

A: Not including the fob shipping purchases in the ending inventory will understate the ending…

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.