Assuming no beginning inventory, what can be said about the trend of inventory prices if cost of goods sold computed when inventory is valued using the FIFO method exceeds cost of goods sold when inventory is valued using the LIFO method? a. Prices decreased. b. Prices remained unchanged. c. Prices increased. d. Price trend cannot be determined from information given.

Q: Mark each of the following statements as either True or False and select the correct answer. _ In…

A: FIFO (First in First out )a)FIFO assumes the first items purchased are the first ones sold. It is…

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: Which Inventory Valuation method gives the highest profit when inventory costs are rising? a.…

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

Q: If ending inventory is understaffed for year 1, then in year 2…. A. Costa of goods sold and gross…

A: Inventory is the term used in accounting which refers to the goods as well as materials that the…

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: Match the inventory method with its related characteristic. Assume a period of rising prices in all…

A: The objective of the question is to match the inventory valuation methods (LIFO, FIFO, Weighted…

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: Which of the following variations of the reail inventory method would generally result in the lowest…

A: FIFO is a method used to value inventories. In First-In-First-Out (FIFO) method the cost of the…

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: 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: Prepare a memorandum containing responses to the following items. a.    Describe the cost flow…

A: a.

Q: 1. Journalize the adjustment for inventory shrinkage. 2. Journalize the adjustment for estimated…

A: Given: Merchandise inventory = $ 5,200 Inventory on June 30, 2018 = $ 4,900 Amount of Sold…

Q: For each of the following situations, indicate whether FIFO, LIFO, or weighted average applies: a.…

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

Q: If the inventory is valued at cost and the price level is steadily increasing, which type of…

A: Under FIFO, goods that are purchased initially are sold first, however, under LIFO it is assumed…

Q: Under the lower of cost or market inventory valuation rule, market value of inventory is defined as:…

A: Market value is the price of an item/product prevailing in the market on the given date.

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: During a period of rising inventory prices, a company's cost of goods sold would be higher using the…

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

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: 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: Multiple Choice. Weighted average. LIFO, FIFO, and the weighted-average inventory cost flow methods…

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

Q: What is inventory shrinkage? The difference between product cost and retail selling price. The…

A: Inventory shrinkage refers to the discrepancy between the perpetual system generated Inventory level…

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 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: nventory is unde this error in the c Goods Sold Net

A: The right  answer is  option b  Cost of goods sold is understated and Net Income is overstated

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.