Allowance Method in accounting for inventory write-down

Q: Both IFRS and U.S. GAAP apply the lower of cost or market method for reporting inventory values. If…

A: LCM Method: Termed as Lower of Cost or Market, this method explains that the inventory of a company…

Q: Indicate whether a company interested in minimizing its income taxes should choose the FIFO orLIFO…

A: FIFO - First In First Out LIFO - Lase In First Out

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: n accounting for by-products, when the by-products are sold for more than the estimated sales value,…

A: There are two options available to the entity. The entity can choose either of the following options…

Q: Which of the following statements is true for a company using the periodic inventory method? A.…

A: Inventory valuation is referred to as that method which helps in assigning a monetary value to the…

Q: What is the effect on net income if a company failed ro record a purchase in transit (FOB shipping…

A: Purchase in transit (FOB shipping point) means that where buyer become the owner of the goods at the…

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: 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: 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: 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: Jamison Corporation’s inventory cost in its balance sheet is lower using the first-in, first-out…

A: Option b. down is the answer.

Q: True False 1. During a period of rising costs, the LIFO cost flow assumption results in lower cost…

A: LIFO means last in first out where as FIFO means first in first out. Inventory and cost of goods…

Q: Required: 1. What is the estimated fire loss if OOO Company applies the conservative retail…

A: Retail inventory method  refers to the method used by retailers who resell products in order to…

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

A:

Q: Do you agree with the following statements? Express your opinion on each statement.

A: 1: This statement is correct  This can be explained with the help of example: Suppose closing stock…

Q: Do you agree with the following statements? Express your opinion on each statement. An inventory…

A: 1) This statement is correct  This can be explain with the help of example: Suppose closing stock is…

Q: How are errors in inventory between physical counts and the perpetual impact the income statement? O…

A: The practice of physically counting and confirming the precise amount of items or materials on hand…

Q: If costs are rising, which inventory costing method will result in the lowest income tax expense for…

A: Inventory is very necessary in the business but method of valuation decide the cost of goods sold…

Q: O c) January 1st in two years

A: Spousal RRSPs allow a higher-earning spouse to contribute to an RRSP in their partner's name,…

Q: ic inventory system wants to remove beginning estimated returns inventory, which of the following…

A: The right answer is option a.Estimated Returns Inventory

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: 48)The situation that requires a departure from the cost basis of accounting to the lower-of-…

A: Whenever there is a decrease in the value of inventory than in such a case inventory is valued in…

Q: When sales are made with a right of return, the company_ а. should recognize revenue for the full…

A: The revenue would be posted in the income statement of the company. The expenses are deducted form…

Q: The management of Milque Corp. is considering the effects of inventory-costing methods on its…

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

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: The application of the lower of cost or market rule to inventory valuation is an example of a. the…

A: The valuation of inventory is done at lower of cost or net realisable value as per relevant…

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: (b) Assuming that the perpetual inventory method is used and costs are computed at the time of each…

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

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…

Q: A company experiences inventory shrinkage and records the proper entry to account for it. As a…

A: Inventory shrinkage: Any errors or losses of merchandise due to breakage, theft or spoilage 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.