Explain an example of dollar value LIFO retail method.

Q: What does inventories /sales ratio mean?

A: An accounting metric used to measure liquidity, solvency, efficiency etc. of a business entity is…

Q: Define the term merchandise returns.

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: Why does Sales discounts are variable consideration?

A: Variable considerations: Variable consideration refers to the amount that the corporation is…

Q: Explain the LIFO retail inventory method.

A: LIFO: Under this inventory method, the units that are purchased last, are sold first. Thus, it…

Q: What is a LIFO inventory pool?

A: Definition: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So,…

Q: How do you measure gross margin return on inventory(GMROI)?

A: GMROI is a measure of inventory profitability where, it measures how much profit does the sales…

Q: Define Sales discounts.

A: Merchandising businesses: Merchandising companies which buy goods from suppliers, or manufacturers,…

Q: what is FIFO inventory method?

A: FIFO inventory method is one of the methods of calculation of value of ending Inventory and cost of…

Q: List price × trade discount rate = amount of trade discount. true or false

A: The question is related to true or false.

Q: Explain the argument for and against the use of net price method with respect to purchase discounts?

A: The Net Price Method (NPM) provides information about the purchase discounts lost by the company and…

Q: Explain how the lower of cost and net realizable value rule is applied to purchase commitments.

A: Purchase Commitments: It refers to the commitments or contract made by a company with its suppliers…

Q: How to calculate the list price? O a. List price = Amount of Discount/Rate of Discount O b. List…

A: Discount means the amount which is not required to be paid or received. Discount is deducted to find…

Q: How to calculate total selling expense

A: Selling expenses are the expenses incurred to sell a product to the customer.

Q: Explain the accounting for sales with right of return.

A: Definition: Accounting for sales with a right of return: Accounting for sales with the right of…

Q: Explain percent of sales method.

A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short period…

Q: For commercial reasons, a weighted average and inventory system from lifo fifo should be considered.

A: The LIFO (Last in, first-out) The LIFO accounting method is used to value inventory. This method is…

Q: How to get or compute the gross sales

A: Gross sales is presented in income statement.

Q: Explain the Sales Comparison Approach?

A: Sales comparison approach is comparative market analysis that compares a property to other…

Q: Which of the following is the correct calculation of selling price? O a. Cost + Mark-up O b.…

A: Selling price is price at which goods and services are sold to customer. This selling price includes…

Q: What is the proper accounting for volume discounts onsales of products?

A: Volume discounts: It is an incentive to encourage for an increase in business. The seller issue…

Q: Explain an example how to calculate inventory turnover ratio.

A: Inventory turnover ratio : Inventory turnover is used to find how many times a company sold its…

Q: How do you use FIFO and LIFO to calculate the cost of inventory?

A: Lets understand the meaning of LIFO and FIFO method. In First In First Out (FIFO) method company…

Q: Explain an example how to calculate net cost of inventory.

A: Net Cost of Inventory indicates the actual cost of inventory purchased. Net cost of inventory is…

Q: A measure of the overall price level paid for various goods and services by individuals: O a. Gross…

A: Solution:- Gross Domestic Product (GDP) means the sum total of prices of goods and services paid by…

Q: Define Inventory turnover ratio.

A: Ratio analysis: The analysis of a company using the financial ratios and comparing its trends and…

Q: Discuss the relationship among consumer savings, purchasing power, and inflation.

A: There is a relationship between the pace of inflation and the amount of money that people are able…

Q: Explain the term sales value at splitoff method.

A: Definition:   Product costs: The costs incurred to acquire the merchandise, ship the stock, prepare…

Q: Which of the following accounts would normally have adebit balance?a. Inventoryb. Sales Returns and…

A: Normal balance refers to the excess of amount on one side, over the amount on the other side in an…

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.