On January 3, 2021 ABC acquired 90% of DEF at book value. The following information is available: 2022 2021 Inventory, Dec. 31 Intercompany cost of sales 30,000 20,000 60,000 60,000

Q: What are the two types of inventory accounting systems? Briefly describe each.

A: Inventory Accounting Systems: Merchandise operation is an operation undertaken by the company to…

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: Define inventory.

A: Inventory: Inventory consist of total of three components: raw material, work-in-process and…

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: What is an ABC analysis with regard to inventory?

A: ABC analysis: ABC analysis is an inventory classification technique used as a basic arrangement…

Q: Continuous determination of inventory ending value and gross profits are available in one of the…

A: The inventory valuation is performed differently in different systems.

Q: calculate the value of closing inventory uing the weighted average cost inventory valuation method

A: Solution: Weighted average cost per unit is computed as = Cost of goods available for sale / units…

Q: List three accounting information system (AIS) activities for transactions categorized as selling…

A: THE PURPOSE OF ACCOUNTING INFORMATION SYSTEM (AIS) IS TO COLLECT , STORE AND PROCESS FINANCIAL  AND…

Q: Explain which physical units of goods should be included in inventory.

A: Inventory:   It refers to an accounting term used to describe the goods in various stages in the…

Q: Define beginning inventory and ending inventory

A: The beginning inventory and ending inventory are explained as below,   The Inventory can be defined…

Q: Define Periodic inventory system.

A: Periodic inventory is a system of inventory in which updates are made on a periodic basis. This…

Q: Determine the goods and costs included in inventory.

A: The cost included in inventory includes all the costs incurred to prepare such inventory for sale.…

Q: A small manufacturing or trading concern maintains its inventory on which system   a. Average…

A: Inventory means the stock of goods in hand . Goods means the thing in which the business deals and…

Q: oods purchased and held for resale are commonly known as _____. perpetual inventoryperiodic…

A: Periodic Inventory System: The periodic inventory system records and updates the inventory at the…

Q: What does the cost of merchandise inventory includes?

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

Q: How is Inventory audited?

A: Introduction Inventory audit is an analytical procedure that cross checks the financial records with…

Q: a) Discuss the reasons why a proper understanding of the free on board (FOB) terms is important when…

A: FOB is an abbreviation for free on board. Free on Board means the seller takes risk till the time…

Q: What are inventory stock taking system

A: The answer for the theory question on inventory stock taking system is discussed hereunder : Stock…

Q: Describe a  Comparison of the Perpetual and Periodic Inventory Systems

A:

Q: schedule of COGS, Net purchase, and Net sale

A:

Q: Which products and services type consists of multiple products or services? Multiple Choice…

A: Ans. Multiple products or services are sometimes bundled together in imperfect competitive market.

Q: Features of perpetual inventory system

A: Required  Features of perpetual inventory system?

Q: What is Included in Inventory?

A: Inventory is the assets available for sale and used in process of production of such assets for sale…

Q: Discuss the different types of Inventory system

A: Traditionally the inventory is recorded by manually counting the items in the warehouse and it is…

Q: Give a detailed definition of "inventory', based on IAS2, Inventories. Use suitable examples to…

A: Inventory is defined as the goods and materials held by a business for sale in the ordinary course…

Q: Define Perpetual inventory system.

A: A perpetual inventory system updates and records the transaction as and when it occurs either at the…

Q: What does the term merchandise inventory mean?   merchandise on hand, a fixed asset, merchandise…

A: Merchandise inventory means goods or inventory lying with the business either for the purpose of…

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.