An increasing inventory turnover ratioa. Indicates a longer time span between the ordering andreceiving of inventory.b. Indicates a shorter time span between the ordering andreceiving of inventory.c. Indicates a shorter time span between the purchase andsale of inventory.d. Indicates a longer time span between the purchase andsale of inventory.

Q: Using a periodic inventory system, Bertram Company records inventory at lower of cost or NRV using…

A: Periodic system of inventory is the one which states the inventory under that the updates are made…

Q: Explain the two methods of inventory tracking: inventory turnover ratio and number of days' sales in…

A:

Q: (True or False) Cost of sales, under the periodic system, is calculated as inventory at start (plus…

A: Periodic Inventory System - Under periodic inventory system cost of goods sold will be calculated at…

Q: Required: Adjusting entry

A:

Q: In a period of rising prices, the inventory method which tends to give the highest reported…

A: During a period of rising prices FIFO Method is expected to give highest reported inventory as in…

Q: In a periodic inventory system, the quantity of ending inventory is determined by: a. Looking at the…

A: Under the periodic inventory method total ending inventory can be calculated by physical count.

Q: Identify that if prices are rising, which inventory cost flow method will produce the highest amount…

A: solution Identify that if prices are rising, which inventory cost flow method will produce the…

Q: Compared to using the FIFO method to account for inventory, during periods of risingprices, a…

A: USING OF LIFO METHOD

Q: Using a periodic inventory system, Bertram Company records inventory at lower of cost or NRV using…

A: As per accounting standards, inventory has to be reported at lower of cost or NRV. Normally the…

Q: This inventory costing method requires recalculation of the average cost of all items in stock after…

A: Inventory valuation is basically based on the flow of inventory. It is up to the company which…

Q: Identify the inventory costing method (SI, FIFO, LIFO, or WA) best described by each of the…

A: Each inventory valuation methods possesses its own uniqueness that will affect the financial…

Q: In a period of rising prices, the inventory cost allocation method that tends to result in the…

A: In the period of rising prices, method resulting in highest net income would be the method under…

Q: Inventory turnover indicates Group of answer choices the pattern of transferring units costs from…

A: Ratio analysis is one of the important tool used in management accounting. Efficiency ratios is one…

Q: gross profit method assumes

A: The gross profit technique calculates the value of inventory by combining current period data on net…

Q: If beginning inventory is understated by $980O, the effect of this error in the current period is…

A: The COGS is determined based on beginning inventory, inventory purchase, and closing inventory. COGS…

Q: Which of the following statements about a periodic inventory system is true? a. The periodic system…

A: Periodic inventory system means where day to day in or out of goods is not recorded and value of…

Q: Assuming that all net sales figures are at retail and all cost of goods sold figures are at cost,…

A: A ratio that provides information regarding the number of times a company sold or replaced its…

Q: Which of the following measures the length of time it takes to acquire, sell, and replace inventory?…

A: Numbers of days to sell inventory: This ratio is determined as the number of days a particular…

Q: If purchases were recorded correctly but ending physical inventory is understated, which one of the…

A: Working capital, conjointly referred to as web assets (NWC), is that the distinction between a…

Q: Assume that a firm separately determined inventory under FIFO and LIFO and then compared the…

A: FIFO is a method of costing inventory in which the inventory purchased first is out first for…

Q: The process of recording inventory that gives a lower cost of a commodity sold in an income…

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

Q: A periodic inventory system does not continually modify inventory amounts, but instead adjusts for…

A: The inventory under the periodic inventory system does not modify continuously but at the end. The…

Q: Assuming that all net sales figures are at retail and all cost of goods sold figures are at cost,…

A: Average inventory = (beginning inventory+ending inventory)/2 Inventory turnover = net sales/Average…

Q: Interpretation of the inventory holding period depends on the industry in which a business operates.…

A: More the inventory holding more the carrying and holding cost, hence business should encircle that…

Q: An increase in the inventory turnover rate is indicative of: Multiple Choice a decrease in the cost…

A: Inventory turnover rate is calculated as ratio of cost of goods sold and inventory

Q: Inventory Turnover Ratio shows the speed at which the inventory will be converted into sales. Select…

A: Introduction: Inventory turnover ratio is one of the financial ratios which is computed by any…

Q: Which of the following is used to analyze the efficiency and effectiveness of inventory management?…

A: Formulas:  Inventory turnover ratio = Cost of goods sold / Average inventory Days' sales in…

Q: Under a perpetual inventory system: Multiple Choice Cost of good sold is recorded with a period-end…

A: Inventory management is an important activity of management, it means management of storing,…

Q: Which of the following is false? Select one: a. Days’ sales in inventory is equal to the average…

A: Option “B” is False.

Q: If beginning inventory is understated by $15,000, the effect of this error in the current period is…

A: Inventory error cab effect both Balance Sheet and Income Statement.

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…

Q: a. Why is a high inventory turnover considered to be a positive indicator?b. Is it possible to have…

A: a.Inventory turnover shows the company’s ability to sell its inventory, it is shown in terms of…

Q: calculate the average inventory (in $) and inventory turnover for the following. If the actual…

A: Cost of Goods Sold: It is the cost of producing the goods which are sold by the business.  Average…

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: a period in which the cost of inventory is rising, which of the following statements is true? The…

A: Issue of Material and its valuation: When the material purchased then that material is stored at its…

Q: Which of the following is false? Select one: a. Day's sales in inventory is equal to the average…

A: The correct option is part (b), that is higher day’s sales in inventory means that inventory is less…

Q: Which inventory costing method assigns to ending merchandise inventory the newest— the most…

A: The LIFO (last-in, first-out) method of inventory costing assumes that the costs of the most recent…

Q: 3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e.,…

A: Cost of goods sold (COGS)- The cost incurred on the goods sold during the period is referred to as…

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.